Bill > S2966

This bill provides emergency financial relief for federal workers during a government shutdown (referred to as a "qualified lapse in appropriations") by modifying rules for the Thrift Savings Plan (TSP), which is a retirement savings and investment plan for federal employees. Specifically, the bill allows federal employees who are furloughed or working without pay during a shutdown lasting at least two weeks to make financial hardship withdrawals from their TSP account without incurring the typical 10% early withdrawal penalty. The bill limits these penalty-free withdrawals to $30,000 per shutdown, with the amount adjusted annually for inflation. Additionally, the bill provides flexibility for employees to repay these withdrawals within 120 days and prevents missed loan payments during a shutdown from being treated as taxable distributions. The bill aims to provide financial protection for federal workers who may experience financial strain during government funding lapses, ensuring they can access their retirement funds without additional financial penalties during periods of economic uncertainty caused by government shutdowns.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/2966/all-info