Bill Would Let Federal Employees Tap Their TSP Funds During Shutdown

Recently introduced legislation would allow excepted federal employees to withdraw from the TSP with no penalties to have money during shutdowns.

Legislation introduced last week would allow federal employees deemed excepted (and who therefore must work during the partial government shutdown) to withdraw from their Thrift Savings Plan accounts without penalty.

The bill (H.R. 338) was introduced by Congressman Mark Meadows (R-NC) and would let excepted federal workers make a withdrawal from the TSP up to the amount of money they would otherwise be receiving for their pay without penalty.

Current law does not allow federal workers to make withdrawals from the TSP program under this exception, but if passed into law, this bill would make this allowance until the shutdown is over. Once a shutdown concludes, federal employees would be permitted to make “catch-up contributions” to the TSP that could be up to the amount they withdrew during the partial government shutdown.

Meadows says that this would provide a fiscally responsible approach to ensure that federal employees who must work during a partial government shutdown could have access to money they’ve earned while Congress negotiates a funding bill. It provides workers more options and flexibility to continue meeting financial needs where few options currently exist.

Meadows said in a statement about the bill:

I’ve said repeatedly that member of Congress should not be paid during a government shutdown—but federal workers (who continue to work) should be. The hardship that government funding impasses put on members of our federal workforce should not be lost on anyone, and we in Congress should be able to find a solution that allows employees to have access to pay for the work they do. Congress should vote on this bill as soon as possible to provide federal employees the options and flexibility they need during a difficult financial situation.

Meadows received a lot of criticism from federal employees for comments he made when the shutdown began. In response to questions from reporters about TSA and Border Patrol agents who would have to work without pay if there were to be a shutdown, he said, “It’s actually part of what you do when you sign up for any public service position,” but added, “And it’s not lost on me in terms of, you know, the potential hardship. At the same time, they know they would be required to work and even in preparation for a potential shutdown those groups within the agencies have been instructed to show up.”

Meadows has pledged to have his salary withheld for the duration of the shutdown and has said he doesn’t believe Members of Congress should receive a salary during a shutdown.

Announcement from the TSP on Loans

For federal employees who may be dealing with loan payments during the shutdown, the TSP recently announced that it was waiving the requirement to show proof of furloughs to suspend TSP loan payments to prevent the loans from going into default. For details, see the full announcement.

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.