Federal law enforcement officers and firefighters will be able to access retirement funds earlier without penalty, under legislation passed unanimously by the Senate June 4.
The amends the tax code to allow federal law enforcement officers, firefighters and certain border protection and customs officers to withdraw funds from their Thrift Savings Plan (TSP) after the age of 50 without a tax penalty.
The house passed a similar version of the legislation last month, but the House must now take up the Senate's amended version of the bill.
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. Usually the earliest possible withdrawal date without penalty is 59.5 years old.
That means that many federal employees are forced to suffer a 10 percent tax penalty for up to 10 years or wait a long time to withdraw the money to use for retirement.
Sen. Pat Toomey, R-Pa., who sponsored the legislation, said the legislation eliminates the excessive tax on law enforcement officers and helps them retire earlier without unneeded penalties.
See also: House drops TSP tax penalty for retired federal officers
"Because our federal law enforcement officers put their lives on the line for us, often in hazardous duty, they may retire at age 50 after completing 20 years of service," Toomey said "However, current withdrawal penalty rules can place them in years of unnecessary limbo."
Jon Adler, president of the Federal Law Enforcement Officers Association, said " federal public safety officers should be able to access their Thrift Savings Plan at age 50 without the harsh IRS 10 percent penalty."
Eric Young, the Council of Prison locals president at the American Federation of Government Employees union, said correctional workers are responsible for securing dangerous criminals and put their lives on the line on a daily basis.
"Correctional Workers earned their retirement with blood and sacrifice, and it is simple fairness that they should be able to access their retirement accounts without an IRS penalty," Young said.
