Legislation Would Ensure State & Local Corrections Officers Are Exempt From a Federal Tax Penalty Imposed on Early Withdrawals From Qualified Retirement Accounts
Denver — U.S. Senators Michael Bennet (D-Colo.) and Pat Toomey (R-Pa.) introduced the State and Local Corrections Officer Retirement Fairness Act of 2022, which exempts state and local corrections officers from paying a federal tax penalty for early withdrawals from qualified retirement accounts. Currently, federal corrections officers are exempt from such penalties.
Due to the physically taxing nature of this profession, many officers retire prior to age 59 ½, which is the age at which individuals can withdraw from qualified retirement accounts without facing a 10 percent early withdrawal penalty. In 2015, Bennet and Toomey introduced the Federal Public Safety Retirement Fairness Act, which made all federal law enforcement officers eligible for an exemption to the early withdrawal penalty, and which passed into law as part of a broader package. With the State and Local Corrections Officer Retirement Fairness Act of 2022, eligibility for this exemption would expand to include state and local corrections officers.
“State and local corrections officers in Colorado and across the country work long, hard hours — and their demanding jobs as essential public service workers often mean they face early retirement,” said Bennet. “When they’re ready to retire, our bipartisan legislation would provide them with the same security as federal law enforcement officers by ensuring they won’t face penalties when they access their savings.”
“Law enforcement officers and public safety employees endure unique physical demands and stress throughout their careers, leading to earlier-than-normal retirements. This small change to the federal tax code will ensure that all of America’s law enforcement and public safety employees have access to this exemption and can utilize their hard-earned retirement savings penalty-free,” said Toomey.
“The National Prison Council would like to thank Senator Bennet and Senator Toomey for their continued support of the nation's Correctional Officers and the Corrections Profession by introducing the State and Local Corrections Officer Retirement Fairness Act of 2022,” said Shane Fausey, National President, Council of Prison Locals 33.
“This bill is a great way to honor corrections employees and the uniquely difficult work they do. Having the ability to retire a little earlier and without a penalty to their retirement will certainly benefit corrections employees and honor the work they do to make our communities safe,” said Hilary Glasgow, the Executive Director of the state employees union, Colorado WINS. “We're proud to see our elected leaders lifting up public employees and the essential work they do to keep our state running.”
A one-page summary of the bill is available HERE.