TSP Modernization Act of 2017

To amend title 5, United States Code, to provide for flexibility in making withdrawals from a Thrift Savings Plan account, and for other purposes. 1. Short title This Act may be cited as the TSP Modernization Act of 2017 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 may make one or more withdrawals (B) by striking as a single payment in the same manner as a single payment is made (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 this subchapter (2) in paragraph (2)— (A) by striking change an return a payment that was made pursuant to an (B) by striking on or after 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 Notwithstanding (2) by striking this paragraph this subsection (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 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) 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, 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. October 10, 2017 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Summary: TSP Modernization Act of 2017 (Sec. 2) This bill modifies the rules relating to withdrawals from the Thrift Savings Plan accounts of former federal employees and Members of Congress. Under current law, such employees and Members may make only one partial withdrawal upon reaching age 59-1/2 while employed or one withdrawal after retirement. The bill permits an unlimited number of such withdrawals. The bill also eliminates: (1) the automatic annuity as a default option if the plan participant does not make an election to establish an annuity, and (2) the limitation on age-based in-service withdrawals.