TSP Modernization Act Reported Out of House Committee

A bill that would allow federal employees to make multiple withdrawals from their TSP accounts has taken another step forward in the House.

Legislation recently introduced in the House to allow federal employees to take multiple withdrawals from their Thrift Savings Plan accounts has been reported out of the House Oversight and Government Reform Committee to be considered by the House as a whole.

The TSP Modernization Act of 2017 (H.R. 3031) was introduced by Congressmen Mark Meadows (R-NC) and Elijah Cummings (D-MD) and would allow TSP participants to do the following:

  • Make multiple age-based and post-separation withdrawals
  • Revise the timing and amounts of periodic payments
  • Elect to combine partial withdrawals or an annuity with periodic payments
  • Eliminate automatic annuities as a default option in the absence of an election by participants

Under current law, TSP participants are limited to one withdrawal from their accounts while in federal service upon reaching the age of 59 1/2 (age-based withdrawal), and participants who leave federal service can make only one withdrawal of a portion of the balance in their account (post-separation withdrawal).

For more information, see Legislation Introduced to Allow Multiple Withdrawals from the TSP.

Companion Senate Legislation

A companion bill has also been introduced in the Senate (S. 873) and has also advanced out of Committee.

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.