Washington, D.C. - Bipartisan legislation championed by U.S. Senators Michael Bennet (D-Colo.) and Pat Toomey (R-Pa.) to protect the retirement accounts of federal public safety officers who are eligible for early retirement passed the Senate unanimously yesterday.
Many federal law enforcement officers, firefighters, and air traffic controllers are eligible to retire at age 50 due to the hazardous and stressful nature of their jobs. However, if they retire and want to withdraw funds from their contribution-based retirement account -- known as the Thrift Savings Plan (TSP) -- they incur a hefty 10 percent penalty unless they wait until age 55. This withdrawal penalty imposes an unfair financial hit on these retired workers who want to access the funds in their own retirement plan.
The bipartisan Defending Public Safety Employees' Retirement Act, which is the House companion to the bill introduced by Sens. Toomey and Bennet, would exempt federal law enforcement officers, firefighters, and air traffic controllers from the 10 percent penalty on early distributions from federal retirement plans for those who retire after age 50.
"Federal law enforcement officers in Colorado and across the country play a critical role in keeping the nation safe," Sen. Bennet said. "They should not be penalized when they retire early due to the high-stress nature of their jobs. This bill makes a commonsense correction to these retirement rules to ensure they can continue to provide for their families and enjoy their retirement."
"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," said Sen. Toomey. "However, current withdrawal penalty rules can place them in years of unnecessary limbo. These public servants must either wait until age 55 to access the funds they contributed, or pay an excessive 10 percent tax. Our bipartisan bill eliminates the early withdrawal penalty for some of our longest-serving federal law enforcement officers."
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