Bill would let troops put leave into TSP at retirement - Military Retirement - Navy Times

Bill would let troops put leave into TSP at retirement

A new bill would allow Thrift Savings Plan participants to deposit some or all of the cash value of their unused annual leave into their accounts when they retire.

The IRS began in September allowing private-sector employees to roll the cash value of unused vacation and sick leave time into their 401(k) accounts. The new bill would allow TSP participants to do the same for vacation time, but it would not allow federal civilian employees or service members to convert sick leave.

Unused leave deposits would count toward annual contribution limits set by the IRS. Employees under age 50 are capped at $16,500 per year; employees 50 or older can contribute an additional $5,500.

Reps. Stephen Lynch, D-Mass., and Jason Chaffetz, R-Utah, are co-sponsors of HR 4865, the 2010 Federal Employees and Uniformed Services Retirement Equity Act, introduced in mid-March.

The fact that the bill has bipartisan support “means that we can get something done,” said Tom Trabucco, spokesman for the Federal Retirement Thrift Investment Board, after the board’s monthly meeting in Washington on March 15.

In other TSP news, the recovering stock market helped push TSP’s overall fund balance to $246.3 billion in February — its highest level ever.

According to statistics released in mid-March, the February fund balance was almost 29 percent higher than it was a year earlier, when the TSP hit its recession-era low of $191.5 billion.

Part of that peak was driven by the recovering C Fund, which was up 3.11 percent in February, and the S Fund, which was up 4.89 percent. The I Fund’s international stocks were essentially flat in February.

Total participation in the TSP also hit a new high of nearly 4.3 million people in February, which also contributes to the growing fund balance.

In another sign of recovery, the number and amount of outstanding loans decreased slightly in February, to almost 816,800 loans worth $7.2 billion. It was the first month since May 2008 that both the number and dollar amount of loans dropped in the same month.