Bill Allows Feds to Withdraw Retirement Funds without Penalty

Categories: The Insider

The Financial Relief for Feds Act allows federal employees who are working without pay or locked out of work without pay, as well as contractors whose sole source of income is their federal contract, to make multiple withdrawals from their retirement accounts such as Thrift Savings Plans (TSP) and IRAs without the 10% penalty that usually applies. Once the government reopens, they can recontribute the money into their accounts.

“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,” said Rep. Pete Olson of Texas, one of the bill’s co-sponsors. “I urge Congress to pass this bill quickly to provide needed relief to federal employees.”

“The only way to fully stop the damage being done by this shutdown is to reopen the government, but until that happens Congress should do everything in its power to help federal workers who are affected,” said Rep. Don Beyer of Virginia. “This bipartisan legislation would give families flexibility to help manage bills that cannot wait, and I am proud to join my colleagues Congressmen Olson and Perlmutter in introducing it.”

“This continued shutdown is jeopardizing the livelihoods of the hardworking men and women who work for our country. Missing paychecks puts a terrible strain on households,” said Rep. Ed Perlmutter of Colorado. “Families should be able to dip into additional savings and retirement funds without penalty in order to keep up with regular bills and expenses during this difficult time.”

Original cosponsors of the bill, H.R. 545, include Reps. Randy Weber of Texas, David McKinley of West Virginia, David Trone of Maryland, Kendra Horn of Oklahoma, Collin Allred of Texas, and Anthony Brown of Maryland.

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