Rep. Elijah Cummings, D-Md., and Rep. Mark Meadows, R-N.C., want to change the way federal employees and retirees use the Thrift Savings Plan.
The pair introduced new legislation on June 23 that would afford federal employees and retirees more opportunities to make withdrawals from the retirement plan without penalty.
Cummings and Meadows' bill — the TSP Modernization Act of 2017 — would remove restrictions that currently allow federal employees to make a withdrawal from their TSP account when the reach the age of 59 1/2 or allow retirees to make a single withdrawal of a portion of their account balance.
Instead, the bill sets up several age-based and post-separation withdrawal periods to provide more flexibility for participants.
"Our bipartisan bill would better align the TSP with other retirement plans offered by the private sector and state and local governments, and it would encourage participants to keep their TSP accounts to take advantage of low administrative fees even after they retire or separate from federal service," Cummings said in a statement.
The pair cited a 2014 survey by the Federal Retirement Thrift Investment Board that found 27 percent of separated participants who transferred $9 billion in TSP funds to other higher-fee retirement funds did so because the other funds offered more flexibility for withdrawals.
Meadows said in a statement that the legislation would provide TSP participants the ability to keep the advantage of a low-fee retirement fund, while affording them more opportunities to access those funds if needed.
"Ultimately, this bill comes down to one simple principle: providing greater flexibility for federal employees," he said. "It will give TSP recipients more access to their own funds and, over the long term, allow them the opportunity to continue taking advantage of benefits similar to those available throughout the private sector after federal service."
Sen. Rob Portman, R-Ohio, introduced similar legislation in April, which was referred to the Senate Homeland Security and Governmental Affairs.
Employee groups like the National Active and Retired Federal Employees Association, American Federation of Government Employees and National Treasury Employees Union have also voiced support for the bill.
"The commonsense withdrawal proposals in your bill will create opportunities for participants before and during retirement, provide greater financial independence and encourage participants to keep their money in the TSP," NARFE President Richard Thissen said in a letter to Cummings' office.
AFGE Legislative Affairs Director Thomas Kahn said in a letter to Cummings and new House Oversight and Government Reform Committee Chair Trey Gowdy, R-S.C., that the bill would provide better opportunity for TSP participants while allowing them to continue to enjoy the benefits of the plan.
"Federal employees should have options that allow for flexibility for financial emergencies and life events," he said. "AFGE fully supports the TSP Modernization Act of 2017."