Bill Would Allow Veterans to Contribute Disability Compensation to the TSP

Recently introduced legislation would give disabled veterans a new option for saving for retirement utilizing the TSP.

Legislation that has been introduced in the spirit of Veterans Day would give some veterans an additional option to help with saving for retirement.

The Financial Independence for Disabled Veterans Act (H.R. 4262) would allow disabled veterans to contribute to their Thrift Savings Plan accounts using their disability compensation. It is being sponsored by Congressman Mark Walker (R-NC).

Walker notes that servicemen and servicewomen have been allowed to contribute to the TSP since 2015, but that they are not able to contribute once they leave military service.

“Our disabled veterans may leave the military, but they never leave service to our country,” Walker said. “Their sacrifice and many of their injuries stay with them. The Financial Independence for Disabled Veterans Act will allow our heroes to keep contributing to their TSP after they leave the Armed Forces and empower them with a more secure financial future.”

The bill stipulates that the Executive Director of the Federal Retirement Thrift Investment Board (FRTIB), the agency that oversees operation of the TSP, shall prescribe regulations to permit continued participation in the TSP by a member of the uniformed services after the discharge or release of the member from service if the member or former member is entitled to veterans disability compensation.

Unlike civilian federal employees, veterans that meet these criteria would not be entitled to a government match as the bill also states that these matching funds would be prohibited.

About the Author

Ian Smith is one of the co-founders of 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.