Fedweek

One change would raise from age 70 ½ to age 72 the point at which retirees must begin taking minimum withdrawals from retirement accounts.

The OPM and the TSP have separately said they are assessing the exact impact of changes in law enacted late in 2019, in the former case providing for paid parental leave for federal employees and in the latter case several changes applying to employer-sponsored retirement savings plans.

OPM has issued a brief memo to agencies calling the parental leave provision–up to 12 weeks per 12 months of paid leave, rather than unpaid leave for birth or adoptions or foster care placements after September 30 – “a major improvement in the compensation and benefits package” for federal employees. OPM said it “will issue necessary regulations and guidance to implement this legislation” although it didn’t say when.

ADVERTISEMENT


Such guidance likely will address the relationship between that leave and other forms of leave available to federal employees, including the unpaid leave entitlement for certain personal or family medical conditions. The new law itself does address some potential questions, for example making clear that the paid parental leave entitlement, like the current unpaid entitlement, will apply only to employees with at least one year of service.

Meanwhile, the TSP has posted a notice on its site regarding a set of changes applying to retirement savings programs called the SECURE Act. Most of the changes are directed toward broadening opportunities for private sector employees to have 401(k)-type plans. However, several—while not mentioning the TSP specifically—affect sections of the tax code that apply to the TSP as well as to those plans.

In particular, one would raise from age 70 ½ to age 72 the point at which retirees must begin taking certain minimum withdrawals from those account, effective with those who had not reached 70 ½ by the end of 2019. Another would allow penalty-free withdrawals by those still working of up to $5,000 of expenses related to a birth or adoption.

The TSP said it is “currently looking into how the SECURE Act might affect the TSP. We will update you as more details are finalized,” similarly providing no time frame.