Bill Would Let Federal Employees Withdraw From Their Retirement Funds During Shutdown

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By on January 17, 2019 in Pay & Benefits with 0 Comments

Glass jar labeled 'IRA' lying on its side filled with coins depicting retirement savings

Legislation introduced this week would allow federal employees and contractors to withdraw from their retirement investments without penalty during the ongoing partial government shutdown.

The Financial Relief for Feds Act (H.R. 545) was introduced by Congressmen Pete Olson (R-TX), Don Beyer (D-VA) and Ed Perlmutter (D-CO). It would allow all federal employees, both excepted and non-excepted, as well as federal contractors, to withdraw from retirement accounts (including IRAs) without the 10% penalty that normally applies.

The Thrift Savings Plan is also included, and federal employees would be able to make multiple withdrawals from the TSP under the terms of the bill.

There would be no limit to the number of distributions made to an individual and each distribution would be $4,000, multiplied by the number of 14-day periods beginning during any Federal appropriations lapse with respect to such individual.

The legislation also allows individuals to put the withdrawn funds back into their retirement accounts after the shutdown concludes.

Olson said in a statement about the bill, “Families of federal employees should not become casualties of partisan politics in Washington. This simple adjustment will allow them to access funds to provide financial stability during a stressful period they have no control over. I urge Congress to pass this bill quickly to provide needed relief to federal employees.”

Similar legislation was introduced last week by Congressman Mark Meadows, however, it would only apply to excepted federal employees who are currently required to work during the shutdown.

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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