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S. 873 - TSP Modernization Act of 2017

Sponsor: Rob Portman (R)
Introduced: 2017-04-06
Bill Status: Placed on Senate Legislative Calendar under General Orders. Calendar No. 260.
 

TSP Modernization Act of 2017

This bill modifies the rules relating to withdrawals from the Thrift Saving Plan (TSP) accounts of former federal employees and Members of Congress. Under current law, such employees and Members may make only one partial withdrawal upon reaching age 59-1/2 while employed or one withdrawal after retirement. The bill permits an unlimited number of such withdrawals.

The bill also eliminates: (1) the withdrawal election deadline (i.e., by April 1 of the year after the year in which the plan participant turns 70-1/2 or is separated from service); and (2) the limitation on age-based in-service withdrawals.

Full Text


115th CONGRESS
1st Session
S. 873


    To amend section 8433 of title 5, United States Code, to provide for flexibility in making withdrawals from the Thrift Savings Fund.


IN THE SENATE OF THE UNITED STATES

April 6 (legislative day, April 4), 2017

    Mr. Portman (for himself and Mr. Carper) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs


A BILL

    To amend section 8433 of title 5, United States Code, to provide for flexibility in making withdrawals from the Thrift Savings Fund.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “TSP Modernization Act of 2017”.

SEC. 2. Withdrawal flexibility.

(a) Post-Separation partial withdrawals.—Section 8433(c) of title 5, United States Code, is amended—

(1) in paragraph (1), by striking “and who has not made a withdrawal under subsection (h)(1)(A) may make one withdrawal” and inserting “may make 1 or more withdrawals”; and

(2) by adding at the end the following:

“(5) Withdrawals under this subsection shall be subject to such other conditions as the Executive Director may prescribe by regulation.”.

(b) Stopping periodic payments.—Section 8433(d)(2) of title 5, United States Code, is amended—

(1) by striking “change an” and inserting “return a payment that was made under”; and

(2) by striking “a payment” and inserting “such payment”.

(c) Elimination of withdrawal election deadline.—Section 8433(f) of title 5, United States Code, is amended—

(1) by striking “(1) Notwithstanding” and inserting “Notwithstanding”; and

(2) by striking paragraph (2).

(d) Age-Based in-Service withdrawals.—Section 8433(h) of title 5, United States Code, is amended—

(1) by striking paragraph (2); and

(2) by redesignating paragraphs (3), (4), and (5) as paragraphs (2), (3), and (4), respectively.

(e) Technical and conforming amendment.—Section 8432b(h)(2)(A) of title 5, United States Code, is amended by striking “section 8433(d), or paragraph (1) or (2) of section 8433(h)” and inserting “subsection (d) or (f) of section 8433”.

(f) Regulations.—As soon as is administratively feasible, as determined by the Executive Director of the Federal Retirement Thrift Investment Board, the Executive Director shall prescribe regulations to carry out the amendments made by this section.

(g) Effective date; applicability.—The amendments made by this section shall—

(1) take effect on the date of enactment of this Act; and

(2) apply on and after the effective date of the regulations prescribed under subsection (f).


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