Another bill has been introduced in the House to allow federal employees to access their Thrift Savings Plan funds without penalty during the ongoing partial government shutdown.
The Shutdown Relief Act (H.R. 673) was introduced by Congresswoman Elaine Luria (D-VA). It would allow federal employees to withdraw up to the amount of their missed shutdown pay without penalty from their TSP accounts as long as the funds are returned within 180 days.
“Our federal workforce should be able to access their hard-earned money during disruptive political breakdowns they had no role in causing,” Luria said.
Under current law, federal workers who are under age 59 ½ may only withdraw funds from the TSP by taking out a loan or by demonstrating that they are suffering from a financial hardship, and if they choose to take a hardship withdrawal, there is a 10% early withdrawal penalty.
Similar legislation was recently introduced in the House by Congressman Mark Meadows (R-NC) that would allow access to TSP funds during the shutdown, however, it would only apply to excepted federal employees. Meadows’ bill also stipulates that once the shutdown is over, these federal employees could make catch-up contributions to restore the lost funds.
And yet another bill that was introduced in the House 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.