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Washington, D.C – Federal employees would have more flexibility for withdrawing money from their Thrift Savings Plan accounts under bipartisan legislation introduced Friday in the U.S. House and endorsed by the National Treasury Employees Union (NTEU).

The current withdrawal rules are too restrictive and NTEU, as a member of the TSP Employee Thrift Advisory Council, has long urged Congress to consider an update.

“It is heartening to see the bipartisan support for making the TSP program more user friendly for federal employees and retirees,” said NTEU National President Tony Reardon. “The TSP is a valuable piece of the federal retirement program and its rules have not kept up with the needs of the modern workforce.”

The House bill introduced Friday is sponsored by Rep. Elijah Cummings (D-Md.) and Rep. Mark Meadows (R-NC) and is similar to legislation already pending in the Senate from Sen. Rob Portman (R-Ohio) and Sen. Thomas Carper (D-Del.).

The TSP Modernization Act would allow active federal employees to make multiple age-based withdrawals and remain eligible for partial withdrawals once they leave government employment. It would allow those who left the federal workforce to make multiple partial post-separation withdrawals. And it would allow those receiving monthly payments to change the amount or frequency of their payment at any time, rather than just once a year.

In 2013, TSP participants who no longer worked for the federal government transferred $9 billion out of the TSP to other institutions. Of those, 27 percent told TSP that they wanted greater flexibility with payments and withdrawals.   

“These are changes our members have been asking for and we hope Congress will act swiftly to enact them,” Reardon said. “We think these improvements will provide an incentive for more people to keep their money in the TSP and allow everyone to continue to benefit from the TSP’s low fees.”

NTEU represents 150,000 employees at 31 federal agencies and departments.