Thrift Savings Plan Modernization Act Strengthens TSP Retirement Accounts; Federal Register Printing Savings Act Stops Unnecessary Printing of Federal Register

WASHINGTON, D.C. – Today, U.S. Senator Rob Portman (R-OH) announced that the Homeland Security and Governmental Affairs Committee unanimously approved two of his bills: the Thrift Savings Plan (TSP) Modernization Act and the Federal Register Printing Savings Act. The TSP Modernizations Act, introduced in April with Senator Tom Carper (D-DE), provides needed retirement flexibility to federal employees by modernizing TSP’s outdated withdrawal rules, which are currently prompting many federal workers to cash out of the TSP entirely. The Federal Register Printing Savings Act, introduced in May, would save taxpayer dollars by eliminating the mandatory daily printing and delivery of the Federal Register to congressional offices.

I am pleased that two common-sense, bipartisan bills to help make the federal government more accountable have been approved out of committee. The TSP Modernization Act will modernize the Thrift Savings Plan and help federal employees maximize their retirement security.  In addition, the Federal Register Printing Savings Act will help save taxpayer dollars and make the federal government more efficient and effective,” said Senator Portman. “I urge my Senate colleagues to act quickly on this bipartisan legislation.”

NOTE:  Currently, federal workers are transferring about $9 billion out of their TSP retirement funds and into other higher fee retirement accounts every year upon separating from federal employment. And a significant reason—as shown by TSP surveys—is the plan’s overly strict withdrawal rules, which provide less flexibility than private sector options.

By modernizing these outdated withdrawal regulations, the TSP Modernization Act will provide federal employees with greater retirement flexibility and advance their ability to retire with dignity. Specifically, for federal employees separate from the federal workforce, the bill will change the current rules that allow only two post-separation withdrawals (in the form of a lump-sum payment, a stream of monthly payments, or annuity payments) to allow multiple, partial post-separation withdrawals that retirees can time to their individual needs. And for federal employees who are still working and are older than age 59½, the bill will allow multiple age-based withdrawals. The bill also adds flexibility to encourage retention in the TSP by allowing the election of quarterly or annual payments, and permitting periodic withdrawals to be changed at any point during the year.

A section-by-section of the TSP Modernization Act can be found here and the text is found here.

The Federal Register Printing Savings Act is estimated to save $1 million annually by eliminating the daily printing and delivery of the Federal Register to congressional offices. A congressional office could still receive the federal register if they ask for it, but the Government Publishing Office would no longer proactively deliver it to offices.

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