Employee unions are pressing the Federal Retirement Thrift Investment Board to give employees more options to borrow against their Thrift Savings Plan accounts while employees remain vulnerable to furloughs.
Agencies have announced hundreds of thousands of unpaid employee furloughs as they grapple with the sequester budget cuts that took effect last month.
Currently employees are restricted to one general purpose loan and one residential loan against their TSP accounts at any given time. Changing those rules would be difficult, Gregory Long, executive director of the thrift board, said at Monday’s board meeting.
“It would take us 2,000 hours of work over 23 weeks,” he said. “In our view, it didn’t make sense to do it.”
TSP loans and withdrawals are limited by statute, and changing the rules would require revising regulations, reprogramming computer systems to allow for two general loans and revising information on multiple public and secure websites. New guidance would have to be issued to the call center representatives and printed information about TSP loans would have to be revised, Long said.
Instead of taking out a TSP loan, Long advised employees facing financial hardships to decrease their contributions to TSP, as needed.
But Cathy Bell, a legislative representative at the National Treasury Employees Union, persisted. “We have to remember it [the sequester] is a 10-year program,” she said.
“You’ve got all these smart people on the other side of the room, I bet you can think of something” to modify borrowing rules, she told Long and the other board members.