Legislation introduced in the House this week would allow federal law enforcement officers (LEOs) and firefighters to withdraw funds from their Thrift Savings Plan accounts when they are eligible to retire without tax penalty.
The legislation (HR 4634) is being sponsored by Reps. Dave Reichert (R-WA) and Bill Pascrell (D-NJ).
Generally, under current law, a 10% penalty is added on top of normal tax amounts taken out of retirement accounts before the age of 59½. In 2006, Congress recognized that state and local public safety officials should be able to access their accounts without penalty at age 50 due to the fact that many of these officials are eligible to retire at earlier ages due to the unique and hazardous nature of the work they perform. The bill would simply extend this benefit to federal law enforcement and firefighters, who are eligible to retire after 20 years of service at age 50.
“Public safety personnel constantly put their lives on the line in the course of serving their communities. These men and women are heroes who run towards danger instead of away from it,” said Reichert. “Their duties are extremely strenuous and can take such a toll that they are eligible to retire earlier than others. There is no reason that federal public safe officials must wait, in some cases, 9 ½ years to access the full retirement benefits they have earned and are entitled to. This is a straightforward measure to make an obvious fix to our tax code and treat our public safety officials with the respect they deserve.”
The bill has received praise from federal law enforcement association groups. General President of the International Association of Fire Fighters Harold A. Schaitberger said, “Federal fire fighters deserve to access their TSP funds without penalty upon retirement. I am pleased to support Representatives Reichert and Pascrell in correcting this inequity, providing federal fire fighters with a benefit already enjoyed by their municipal brothers and sisters.”
