Federal law enforcement officers and firefighters will be able to access retirement funds earlier without penalty, under legislation introduced by a bipartisan pair of lawmakers May 12.
Reps. Dave Reicher, R-Wash., and Bill Pascrell, D-N.J., introduced H.R. 4634, which would allow federal law enforcement officers, firefighters, border protection and customs officers to withdraw funds from their Thrift Savings Plan (TSP) after the age of 50 without a tax penalty.
Under current law, federal law enforcement officers are eligible to retire after 20 years of service at age 50 and must retire in many cases by age 57.
That means that many federal employees are forced to by a 10 percent tax penalty for up to 10 years, according to Jon Adler, president of the Federal Law Enforcement Officers Association.
““It's unjustifiable to ask federal law enforcement officers and firefighters from a diverse array of agencies and missions to wait up to 9 1/2 years after they’re eligible to retire before they can access their savings without an injurious IRS ten percent penalty,” Adler said in a statement.
Congress should act to remove the unfair tax penalty – which does not apply to state and local law enforcement officers, Adler said.
“This is about fairness,” Adler said. “It is about bringing equity to the brave men and women who fill the ranks of federal law enforcement agencies and who sacrifice themselves each and every day in carrying out their sworn duty to protect and serve our fellow citizens,” Adler said.