Introduction of the Thrift Savings Plan Emergency Withdrawal Act of 2025

Floor Speech

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Ms. NORTON. Mr. Speaker, today, I introduce the Thrift Savings Plan Emergency Withdrawal Act of 2025, which would expand the circumstances in which a federal employee recently separated from the federal government can take a penalty-free withdrawal from their Thrift Savings Plan (TSP) account. This bill would help former federal employees pay their bills after separation.

First, this bill would allow a penalty-free withdrawal to make up the gap between the interim payments a retiree receives during the period the Office of Personnel Management is calculating the retiree's final annuity and the estimated final annuity. A retiree's interim payment is generally only 60 percent to 80 percent of the finalized net payment. Second, this bill would allow a penalty-free withdrawal if an individual is involuntarily separated from the federal government. In both cases, the maximum withdrawal would be $100,000. Individuals would be able to make a withdrawal for up to a year after separation and to repay the withdrawn amount within three years to avoid the existing early withdrawal penalty, which is a 10 percent additional tax.

I urge my colleagues to support this bill.

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