Image: Katherine Welles/Shutterstock.com
By: FEDweek StaffThe Senate Finance Committee has cleared for a vote in the full Senate a wide-ranging bill affecting retirement savings and distribution policies, including some that would directly affect the Thrift Savings Plan because it falls under the same general tax laws as 401(k) plans.
The Enhancing American Retirement, or EARN, Act among other things would.
* Allow “catch up contribution” investments for workers age 50 or older in a year, of $10,000 in the years between ages 62 and 65 but requiring that catch-ups be made in after-tax Roth status.
* Allow tax penalty-free withdrawals of up to $2,500 a year for employees to pay long-term care premiums.
* Eliminate the requirement to document the need for employees taking financial hardship withdrawals.
* Allow one penalty-free financial hardship distribution per year of up to $1,000 for needs relating to personal or family emergency expenses.
* Raise the age at which minimum distributions must begin from 72 to 75 on a phased-in basis over eight years and exempt Roth balances from that requirement.
Some provisions would be at the discretion of the employer, and therefore would require a decision by the TSP. For example, one would employers to provide matching contributions for employee student loan payments as if those payments were investments.
It also would set minimum requirements in some areas where TSP policies already go beyond, such as automatic enrollment of new hires and matching contribution rates.
House Republicans Revive Retirement Benefit-Cutting Proposals
Your FERS Annuity is Worth More Than You Think
OPF: Tweak Your Personnel Folder for Maximum Benefits
40,000 Fewer TSP Investors Feeling Like a Million Bucks
Pay Gap Figure Put at 22.47 Percent; More Feds Could Join Higher-Paying Zones
Why So Few are Taking Advantage of TSP Mutual Fund Window
TSP Accounts Shed $100 Billion this Year; Customer Service Woes Continue
Federal Retirement COLA Count Hits 9 Percent
Thanks to a Pension, Feds Are Doing Better than Most in Retirement Preparedness
OMB Previews Potential Changes in Pay, Benefits Law
Retiring from a Federal Job – Getting Started
Retiring from a Federal Job: Make Sure Your Agency Gets it Right
