[Congressional Record Volume 163, Number 163 (Wednesday, October 11, 2017)]
[House]
[Pages H7954-H7955]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     TSP MODERNIZATION ACT OF 2017

  Mr. RUSSELL. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 3031) to amend title 5, United States Code, to provide for 
flexibility in making withdrawals from a Thrift Savings Plan account, 
and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3031

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``TSP Modernization Act of 
     2017''.

     SEC. 2. THRIFT SAVINGS PLAN ACCOUNT WITHDRAWAL FLEXIBILITY.

       (a) Post-Separation Partial Withdrawals.--Section 8433(c) 
     of title 5, United States Code, is amended--
       (1) in paragraph (1)--
       (A) by striking ``and who has not made a withdrawal under 
     subsection (h)(1)(A) may make one withdrawal'' and inserting 
     ``may make one or more withdrawals''; and
       (B) by striking ``as a single payment'' and inserting ``in 
     the same manner as a single payment is made''; and
       (2) by adding at the end the following:
       ``(5) Withdrawals under this subsection shall be subject to 
     such other limitations or conditions as the Executive 
     Director may prescribe by regulation.''.
       (b) Limitation on Return of Payment Relating to a Change in 
     Election.--Section 8433(d) of title 5, United States Code, is 
     amended--
       (1) in paragraph (1), by inserting ``, except that in the 
     case of an election to receive an annuity, a former employee 
     or Member may not change an election under this section on or 
     after the date on which an annuity contract is purchased to 
     provide for the annuity elected by the former employee or 
     Member'' after ``this subchapter''; and
       (2) in paragraph (2)--
       (A) by striking ``change an'' and inserting return a 
     payment that was made pursuant to an''; and
       (B) by striking ``on or after'' and all that follows 
     through ``the former employee or Member''.
       (c) Elimination of Automatic Annuity in Absence of 
     Election.--Section 8433(f) of title 5, United States Code, is 
     amended--
       (1) by striking ``(1) Notwithstanding'' and inserting 
     ``Notwithstanding'';
       (2) by striking ``this paragraph'' and inserting ``this 
     subsection''; and
       (3) by striking paragraph (2).
       (d) Allowance of Multiple Age-Based In-Service 
     Withdrawals.--Section 8433(h) of title 5, United States Code, 
     is amended--
       (1) by striking paragraph (2);
       (2) by redesignating paragraphs (3), (4), and
       (5) as paragraphs (2), (3), and (4), respectively; and
       (3) in paragraph (3), as so redesignated, by inserting 
     ``limitations or'' before ``conditions''.
       (e) Technical Amendment.--Section 8432b(h)(2)(A) of title 
     5, United States Code, is amended by striking ``section 
     8433(d), or paragraph (1) or (2) of section 8433(h)'' and 
     inserting ``subsection (d) or (f) of section 8433''.
       (f) Regulations.--As soon as is practicable, as determined 
     by the Executive Director of the Federal Retirement Thrift 
     Investment Board, but not later than 2 years after the date 
     of enactment of this Act, the Executive Director shall 
     prescribe such regulations as are necessary to carry out the 
     amendments made by this section.
       (g) Effective Date.--The amendments made by this section 
     shall take effect on the date on which the regulations 
     prescribed under subsection (f) take effect.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Oklahoma (Mr. Russell) and the gentlewoman from the District of 
Columbia (Ms. Norton) each will control 20 minutes.
  The Chair recognizes the gentleman from Oklahoma.


                             General Leave

  Mr. RUSSELL. Mr. Speaker, I ask unanimous consent that all Members

[[Page H7955]]

may have 5 legislative days in which to revise and extend their remarks 
and include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Oklahoma?
  There was no objection.
  Mr. RUSSELL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 3031, the TSP Modernization 
Act of 2017, introduced by Ranking Member Cummings from Maryland and 
Mr. Meadows from North Carolina earlier this year.
  Federal employees enrolled in the Federal Employees Retirement 
System--known as FERS--enjoy the benefits of a three-part retirement 
structure. Those are a defined benefit pension plan, Social Security, 
and a 401(k)-style defined contribution plan known as the Thrift 
Savings Plan, or TSP.
  With its low administrative costs and simple design, the TSP is an 
ideal retirement vehicle. Participants can choose from a variety of 
investment options, including index funds designed to track the 
Standard & Poor's 500 Index, the Dow Jones U.S. Completion Total Stock 
Market Index, or a low-risk government securities investment fund.
  Participants can also passively manage their investments by putting 
money into a Lifecycle Fund, which allows the Federal Retirement Thrift 
Investment Board to purchase a combination of investments based on the 
year the employee is expected to retire.
  Employees have a lot of options when investing their TSP funds, but 
when it comes to withdrawing their funds, the options are much more 
limited. This is because current statutory rules preclude employees 
from taking multiple post-service partial withdrawals. Employees cannot 
request a partial withdrawal or annuity purchase after making a 
periodic payment withdrawal election.
  Statutory rules also require the purchase of an annuity if a 
participant fails to make an election by age 70\1/2\. The rules also 
restrict an employee's ability to make multiple in-service, age-based 
withdrawals.
  The Board conducted a study in 2013, which found that separated 
participants moved $9 billion from the TSP fund to other, costlier 
institutions. Nearly one out of every three of these participants cited 
a desire for additional withdrawal flexibility.
  The study also found that, among currently employed participants, the 
same ratio of participants requested additional withdrawal flexibility 
for age-based withdrawals to address life events that arise. This bill 
would afford those additional flexibilities to address those concerns.
  The bill provides more control to Federal employees over their own 
retirement by allowing for multiple post-separation partial withdrawals 
and in-service, age-based withdrawals. H.R. 3031 allows employees to 
change withdrawal elections as they grow older, and it allows the Board 
to avoid purchasing expensive annuities if a participant fails to make 
an election by age 70\1/2\.
  This bill puts power and control in the hands of the employees that 
make our Federal Government run to make retirement decisions based on 
their personal situations.
  Mr. Speaker, I urge my colleagues to support the bill, and I reserve 
the balance of my time.
  Ms. NORTON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support of H.R. 3031, the TSP 
Modernization Act of 2017.
  I am proud to be a cosponsor of this legislation, which would help 
modernize the Federal Government's Thrift Savings Plan by aligning it 
with current practices for private sector 401(k)s.
  I thank Ranking Member Cummings and Chairman Meadows for their work 
on this important, bipartisan bill that would give TSP participants 
more flexibility in making withdrawals from their accounts.
  Mr. Speaker, I urge my colleagues to support H.R. 3031, and I reserve 
the balance of my time.
  Mr. RUSSELL. Mr. Speaker, I reserve the balance of my time.
  Ms. NORTON. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Maryland (Mr. Cummings), who is the ranking member of 
the full committee.
  Mr. CUMMINGS. Mr. Speaker, I thank the gentlewoman for yielding.
  Mr. Speaker, I rise in strong support of H.R. 3031, the TSP 
Modernization Act of 2017.
  I thank the Government Operations Subcommittee chairman, Mr. Meadows, 
for working with me in a bipartisan manner on this commonsense, good 
government bill. I also thank the Oversight and Government Reform 
Committee chairman, Mr. Gowdy, for his support of this legislation.
  Congressman Meadows and I introduced this legislation to make the 
Federal Government's Thrift Savings Plan more closely align with 
private sector best practices by allowing TSP participants more 
flexible withdrawal options.
  In 2013, the Federal Retirement Thrift Investment Board found that 
employees who separated from Federal service transferred $9 billion out 
of their TSP accounts to other financial institutions. TSP participants 
do this because private sector 401(k) plans provide more flexibility, 
and they wanted more options for withdrawing money in case they needed 
it.
  A 2014 survey of TSP participants who withdrew funds showed that more 
than 50 percent reported that they wanted more flexibility to withdraw 
funds to address life events.
  Current law limits participants to only one withdrawal from their TSP 
accounts while in Federal service after reaching age 59\1/2\, and 
participants who make this type of age-based withdrawal cannot take 
another partial withdrawal once they separate from service. Similarly, 
participants who are separated from Federal service and who have not 
made a prior age-based withdrawal are restricted to making only one 
partial separation withdrawal.

  H.R. 3031 would eliminate these restrictions and allow participants 
to make multiple age-based and post-separation withdrawals from TSP 
accounts. The bill also would allow participants to elect to combine 
partial withdrawals with an annuity. It also would eliminate automatic 
annuities as a default option in the absence of an election by 
participants.
  By providing greater withdrawal flexibility, studies show that 
participants would be more likely to keep their assets in their TSP 
accounts. For example, a study issued by Vanguard in 2013 found that 50 
percent more participants and assets remain in retirement plans when 
partial disbursements are allowed.
  Providing more withdrawal options for Federal employees and retirees 
in the TSP may help their financial security since administrative fees 
for the TSP are much lower than fees charged by other financial 
institutions.
  This legislation is supported by the National Active and Retired 
Federal Employees Association, the American Federation of Government 
Employees, and the National Treasury Employees Union.
  Ms. NORTON. Mr. Speaker, I support this legislation, and I yield back 
the balance of my time.
  Mr. RUSSELL. Mr. Speaker, I wish to thank Chairman Gowdy, Ranking 
Member Cummings, and Chairman Meadows for their outstanding work in 
addressing the needs of Federal employees who give selfless public 
service to our Nation and should have this flexibility in their 
retirement planning.
  Mr. Speaker, I urge the adoption of the bill, and I yield back the 
balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Oklahoma (Mr. Russell) that the House suspend the rules 
and pass the bill, H.R. 3031, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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