For federal employees accustomed to elected leaders focused on firing feds faster and bashing their benefits, heres a little something to cheer.
Bipartisan legislation in the House and Senate would update the Thrift Savings Plan (TSP), a 401(k)-type program for federal employees, by allowing them greater flexibility in withdrawing their funds.
This might not sound like much compared to news about federal retirement cuts in President Trumps proposed fiscal 2018 budget and the movement to undermine civil service protections. Yet this little something could make life easier for the 5 million people with TSP investments worth $490 billion.
Meanwhile, Democrats have escalated opposition to the planned cuts, with more than 100 House members opposing President Trumps proposal to gut pensions. Then Trump described workplace protections as outdated laws, at a White House East Room signing ceremony Friday for legislation that now restricts civil service safeguards for Department of Veterans Affairs employees.
Currently, participants reaching the age of 59 are allowed only one TSP withdrawal while actively employed in the government. When they leave federal service, they can withdraw a portion of their balance, but only once. After that, only full withdrawals are permitted.
The TSP Modernization Act introduced Friday by Reps. Elijah E. Cummings (D-Md.) and Mark Meadows (R-N.C.), and earlier in the Senate, would eliminate those restrictions. Investors could make multiple withdrawals at age 59 and after leaving the government.
Its huge, Kim Weaver, a TSP spokesperson, said of the legislation. It is supported by the Federal Retirement Thrift Investment Board, which administers the TSP.
In a memo to the board two years ago, Greg Long, then the executive director, said changes like those in the legislative proposals will allow us to favorably respond to participant demand and move closer to typical plan design found in private and public sector plans. This set of changes will be a win for participants.
The bill would encourage participants to keep their TSP accounts to take advantage of low administrative fees even after they retire or separate from federal service, Cummings said. The legislation would give TSP participants what they want: greater flexibility to withdraw money from their accounts to address unexpected life events.
Its a win for the TSP too, which would keep more money longer.
Restrictive rules pushed many investors to transfer their balances to other financial institutions with more lenient policies but with higher fees.
Meadows called the bill common-sense reform It will give TSP recipients more access to their own funds and, over the long term, allow them the opportunity to continue taking advantage of benefits similar to those available throughout the private sector after federal service.
Sens. Rob Portman (R-Ohio) and Thomas R. Carper (D-Del.) introduced similar Senate legislation in April.
The proposals put federal employee leaders in the relatively rare position of having something from Capitol Hill to praise, as they did in letters to Congress.
Richard G. Thissen, president of the National Active and Retired Federal Employees Association, said the legislation would create opportunities for participants before and during retirement, provide greater financial independence and encourage participants to keep their money in the TSP.
Although TSP provides federal employees with extremely low administrative and investment fees, pretax and after-tax withdrawal options and an employer contribution, Thomas S. Kahn, legislative affairs director of the American Federation of Government Employees, said it does not provide sufficient options for withdrawals while in federal service, or much flexibility involving annuity payments.
National Treasury Employees Union President Tony Reardon welcomed the legislation, saying I have heard from many NTEU members over the years about the stringent withdrawal rules of the TSP the withdrawal rules have not been changed since the TSP was established in 1986 and are outdated.
While the TSP legislation gives feds reason to smile, Trumps budget plan turns that smile upside down. His proposal for a 1.9 percent pay raise for fiscal 2018 is more than offset by his effort to reduce retirement income for federal workers.
Trumps budget would increase individual out-of-pocket contributions to the Federal Employees Retirement System (FERS), base future retirement benefits on the high five years of salary instead of the high three, kill FERS cost-of-living adjustments (COLA), reduce the COLAfor those in the Civil Service Retirement System and eliminate retirement supplements for FERS participants who retire beginning in 2018.
Since 2010, federal employees have had $182 billion taken from their pay as a result of three years of pay freezes, furloughs, sequestration and increased employee retirement contributions, Kahn said. In addition to these losses in compensation and benefits, the cost of living has continued to rise. Nonetheless, federal employees save for retirement and pay into their TSP accounts.
Federal employee retirement programs are threatened, but their TSP is on the verge of getting better. Thats good, but not much consolation.
Read more:
[New withdrawal options forTSPinvestors proposed]
[New VA law sets stage for government-wide cut in civil-service protections]
[Trumps budget calls for hits on federal employee retirement programs]
Here is the original post:
- FMO & IMO | Financial Independence Group, Inc - December 25th, 2016 [December 25th, 2016]
- financial independence - Good Financial Cents - December 31st, 2016 [December 31st, 2016]
- 8 Secrets to Achieving Financial Independence - January 4th, 2017 [January 4th, 2017]
- COLUMN-Millennial parents still like to tap the Bank of Mom & Dad - Thomson Reuters Foundation - February 7th, 2017 [February 7th, 2017]
- Republicans Move on Financial Deregulation; Fed Finalizes Stress Test Guidance - Lexology (registration) - February 7th, 2017 [February 7th, 2017]
- Millennial parents still like to tap the Bank of Mom & Dad - One ... - One America News Network (press release) - February 7th, 2017 [February 7th, 2017]
- Speaking of Women...Are We Really More Financially Independent Now? - Investopedia - February 7th, 2017 [February 7th, 2017]
- House Dems: Trump wants to put Wall Street first - The Hill - February 7th, 2017 [February 7th, 2017]
- 3 insider tips for achieving financial independence | The Motley Fool ... - Motley Fool UK - February 7th, 2017 [February 7th, 2017]
- The power of financial independence - KXAN.com - February 7th, 2017 [February 7th, 2017]
- Find out if you qualify for free tax preparation and financial advice - wtvr.com - February 7th, 2017 [February 7th, 2017]
- My Turn: Program provides a path out of homelessness - AZCentral.com - February 7th, 2017 [February 7th, 2017]
- Getting To Know You Tuesday: Elliot Dole - Forbes - February 7th, 2017 [February 7th, 2017]
- Millennial Parents Still Like to Tap the Bank of Mom & Dad - WealthManagement.com - February 8th, 2017 [February 8th, 2017]
- How to Prioritize Financial Goals When You Can't Do It All - Inside Higher Ed (blog) - February 8th, 2017 [February 8th, 2017]
- How to Modify Money Management After the Presidential Election - Yahoo Finance - February 10th, 2017 [February 10th, 2017]
- Congress could limit the Fed's independence and hurt the US economy - Washington Post - February 13th, 2017 [February 13th, 2017]
- Court Rejects Order Forcing Parents to Pay Tuition - Inside Higher Ed - February 13th, 2017 [February 13th, 2017]
- Syrian refugee families achieve financial independence in Alliston - Simcoe.com - February 14th, 2017 [February 14th, 2017]
- Sheroes Founder Sairee Chahal ventures for Women's Financial Independence in India's sometimes Suffocating ... - Plunge Daily - February 16th, 2017 [February 16th, 2017]
- Advocates say more women need financial independence: 'We really do need that extra leg up' - Globalnews.ca - February 16th, 2017 [February 16th, 2017]
- Surviving widowhood: Five tips to avoid financial hardship - Cincinnati.com - February 16th, 2017 [February 16th, 2017]
- Q & A with Sr. Maureen Gallagher, setting up financial independence paths for women in Mexico - Global Sisters Report (blog) - February 16th, 2017 [February 16th, 2017]
- The road to financial freedom - ABS-CBN News - February 18th, 2017 [February 18th, 2017]
- Byron Moore: Position, Pace and Power perform like a pro - Monroe News Star - February 18th, 2017 [February 18th, 2017]
- Cash Course - Binghamton University Pipe Dream - February 20th, 2017 [February 20th, 2017]
- Independence Financial Partners - SPECIALIZING IN - February 20th, 2017 [February 20th, 2017]
- 'Financial you' hits all bases, aligns with priorities, values - Lehigh Valley Business - February 20th, 2017 [February 20th, 2017]
- International Financial Reporting Standards - Wikipedia - February 21st, 2017 [February 21st, 2017]
- Opinion: Young adults need an easier path to financial independence - LSU Now - February 23rd, 2017 [February 23rd, 2017]
- Retiring in their 30s. Yep, they're doing it. - Crain's Chicago Business - February 24th, 2017 [February 24th, 2017]
- Successful Boomer Women Offer Financial Advice to Younger ... - Fox Business - February 24th, 2017 [February 24th, 2017]
- 'Thousands' of cancer sufferers forced to borrow money from parents because of financial difficulties caused by illness - The Independent - February 27th, 2017 [February 27th, 2017]
- Independence Contract Drilling, Inc. Reports Financial Results For The Fourth Quarter And Year Ended December 31 ... - PR Newswire (press release) - February 28th, 2017 [February 28th, 2017]
- Another way to measure retirement readiness: Your 'Power Percentage' - USA TODAY - March 1st, 2017 [March 1st, 2017]
- Oran Hall | Young cop seeks financial independence | Business ... - Jamaica Gleaner - March 6th, 2017 [March 6th, 2017]
- International Women's Day - Investing for financial independence - Simple Landlords Insurance (press release) (blog) - March 8th, 2017 [March 8th, 2017]
- Game of Thrones gave financial independence to actor Conleth Hill - Bollywood Life - March 8th, 2017 [March 8th, 2017]
- How to Leverage Your Small Business for Financial Success - Kiplinger Personal Finance - March 9th, 2017 [March 9th, 2017]
- A Struggle Back to Financial Independence After a Brain Injury - The Good Men Project - March 9th, 2017 [March 9th, 2017]
- Ten favorite personal-finance books - Christian Science Monitor - March 11th, 2017 [March 11th, 2017]
- Five facts about financial independence - finder.com.au - April 8th, 2017 [April 8th, 2017]
- Regulatory reform leads to financial independence - Argus Leader - Sioux Falls Argus Leader - April 8th, 2017 [April 8th, 2017]
- Mayor Berke's Council For Women Takes On Predatory Lending - The Chattanoogan - June 6th, 2017 [June 6th, 2017]
- Mayor's Council For Women Invites Public To Financial Independence Hearing On Monday - The Chattanoogan - June 6th, 2017 [June 6th, 2017]
- How I Reached Financial Independence By Age 40 - The Dough Roller - June 6th, 2017 [June 6th, 2017]
- Berz: High-interest loans can hamper financial independence - Chattanooga Times Free Press - June 6th, 2017 [June 6th, 2017]
- Financial tips, resources for college grads - WTOP - June 6th, 2017 [June 6th, 2017]
- Public invited to hearing on financial independence, high-interest lending - Nooga.com - June 6th, 2017 [June 6th, 2017]
- Financial Independence | Tardus | Retire Early | Wealth - June 6th, 2017 [June 6th, 2017]
- How to become financially independent in 5 years - Jun. 6, 2017 - CNNMoney - June 7th, 2017 [June 7th, 2017]
- House Republicans Vote to Strip Away Post-Financial Crisis Safeguards - Roll Call - June 8th, 2017 [June 8th, 2017]
- Auditor Independence Definition from Financial Times Lexicon - June 8th, 2017 [June 8th, 2017]
- Top 5 tips to achieve financial independence | Mpumalanga News - Mpumalanga News - June 11th, 2017 [June 11th, 2017]
- Two 6% dividends to help you achieve financial independence ... - AOL UK - June 11th, 2017 [June 11th, 2017]
- Sun Life kicks off Financial Independence Month with beautifully crafted short films - ABS-CBN News - June 13th, 2017 [June 13th, 2017]
- How to become financially independent in 5 years - CNNMoney - June 13th, 2017 [June 13th, 2017]
- Achieve financial independence with stocks by following this one ... - AOL UK - June 17th, 2017 [June 17th, 2017]
- I'll pursue financial independence for judiciary - Akuffo - GhanaWeb - June 20th, 2017 [June 20th, 2017]
- Baker awarded Helping Hands grant - Columbia Daily Tribune - June 22nd, 2017 [June 22nd, 2017]
- Baker awarded Helping Hands grant - Devil's Lake Daily Journal - June 23rd, 2017 [June 23rd, 2017]
- Porter's Five Forces can help you achieve financial independence ... - AOL UK - June 24th, 2017 [June 24th, 2017]
- You can achieve financial independence easily by using buckets ... - AOL UK - June 24th, 2017 [June 24th, 2017]
- You can achieve financial independence easily by using buckets ... - Motley Fool UK - June 26th, 2017 [June 26th, 2017]
- Alabama one of the least financially independent states in the country - Birmingham Business Journal - June 26th, 2017 [June 26th, 2017]
- JL Collins' Tips for Achieving Financial Independence - The Dough Roller - June 26th, 2017 [June 26th, 2017]
- 3 steps to become wealthier and more successful - Ladders - June 27th, 2017 [June 27th, 2017]
- These 5% dividend yields could help you win financial independence - AOL UK - June 30th, 2017 [June 30th, 2017]
- Celebrating Independence - Jewish Link of New Jersey - June 30th, 2017 [June 30th, 2017]
- The easy way to financial independence - AOL UK Money - AOL.co.uk - AOL UK - July 2nd, 2017 [July 2nd, 2017]
- 5 powerful steps towards financial independence and retiring early ... - AOL UK - July 3rd, 2017 [July 3rd, 2017]
- Independence Financial Group - July 3rd, 2017 [July 3rd, 2017]
- Gain Financial Independence Attend a FREE Educational Event - FOX31 Denver - July 14th, 2017 [July 14th, 2017]
- CNNMoney readers react: She retired at 28 with $2.25 million - Aug ... - CNNMoney - August 6th, 2017 [August 6th, 2017]
- How to retire early with financial independence in 3 steps - NBC2 News - August 6th, 2017 [August 6th, 2017]
- Could this miner help you secure financial independence faster than ... - AOL UK - August 24th, 2017 [August 24th, 2017]
- Solutions 4 Financial Independence: 8/22/17 - WDTV - August 24th, 2017 [August 24th, 2017]
- The 7 Stages of Financial Independence | Radical Personal ... - July 30th, 2018 [July 30th, 2018]
- Financial Independence - August 3rd, 2018 [August 3rd, 2018]
- How much does financial independence cost? It depends on your ... - August 3rd, 2018 [August 3rd, 2018]