The Federal Employees and Uniformed Services Retirement Equity Act is bipartisan legislation that would allow federal employees and members of the uniformed services to invest the value of their unused annual leave into their retirement accounts.  An employee or member could contribute to the Thrift Savings Fund, a 401(k)-style defined contribution plan, any amount as long as it does not push them above the upper limit on annual retirement contributions of $16,500 for employees younger than 50 and $22,000 for those 50 or older.  This measure would simply bring the Thrift Savings Fund in line with changes that have already been made to rules governing private 401(k) programs.  This change will allow federal employees and members of the uniformed services to significantly boost their retirement savings.  NFFE-IAM strongly supports this legislation. 

(This bill has yet to be reintroduced in the 112^th Congress. Bill numbers and printable position papers will be provided upon introduction).

The Federal Employees and Uniformed Services Retirement Equity Act will amend title 5, United States Code, to provide that an employee of the federal government or member of the uniformed services may contribute to the Thrift Savings Fund any payment that the employee or member receives for accumulated and accrued annual or vacation leave. This legislation would not allow employees or members to make contributions to the Thrift Savings Fund with unused sick leave.

The Thrift Savings Fund is a defined contribution plan for the United States civil service employees and retirees as well as for members of the uniformed services.  It is designed to closely resemble private sector 401(k) plans.  With the changes proposed in this bill, plan participants would be able to contribute the value of their unused annual leave up to the Internal Revenue Code limitation, which is currently $16,500 for employees younger than 50 and $22,000 for those 50 or older. 

With the changes proposed, federal employees and military service members making contributions to the Thrift Savings Fund using the value of unused annual leave would not be entitled to any matching contributions made by federal agencies.  Typically, federal employees enrolled in the Federal Employees Retirement System (FERS) who contribute their own money are matched dollar for dollar for the first three percent contributed per pay period.  They are then matched 50 cents on the dollar for the next two percent of pay contributed.  Contributions made with the value of unused annual leave would not be matched in this way.

This legislation does nothing more than bring the Thrift Savings Fund in line private sector 401(k) programs.  On September 5, 2009 the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued rulings allowing workers enrolled in private 401(k) programs the ability to convert unused leave into 401(k) savings. This bill would simply make a corresponding change to the Thrift Savings Fund.

This bipartisan legislation would offer a much needed boon to federal employees’ and military service members’ retirement accounts by giving them the ability to convert unused annual leave into retirement savings.  NFFE-IAM strongly supports this legislation.