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Bill would allow federal workers to borrow from their retirement accounts

injured piggy bank
Ken Teegardin

U.S. Representative Elissa Slotkin is co-sponsoring a bill that would allow federal workers to borrow money from their retirement accounts without penalty during the partial government shutdown.

Federal workers can already withdraw funds from their 401k accounts, known as a Thrift Savings Plan (TSP), if they're experiencing a hardship. But they have to pay a ten percent penalty. The Shutdown Relief Act would allow workers to borrow the amount of their lost pay without penalty as long as the funds are returned to the account within 180 days.

Slotkin says the bill would help public servants who are struggling to make ends meet during the shutdown. "Our federal workers are absolutely being held hostage in this situation, and as a federal employee myself for many many years, it is absolutely the wrong thing to be doing, so I wanted to help any way I could." Slotkin said.

The democrat represents Michigan's 8th congressional district.

Slotkin says the bill has bipartisan support and she expects it to pass, "It's something that we expect to pass. It's just a simple no brainer, that if a federal employee has been investing in a retirement account their entire lives, they should be able to borrow against it in a time like this when they're not being paid."

Catherine Shaffer joined Michigan Radio in 2014. She works in the newsroom and specializes in stories related to the life sciences, health, and technology. Catherine earned a bachelor’s degree in Biochemistry from Michigan State University and a Master’s from University of Michigan. Prior to Michigan Radio, Catherine has worked as a freelance writer, mainly in focusing on biotechnology and the pharmaceutical industry, since 2001. She is also an award-winning fiction writer. When not at work, Catherine enjoys being in the outdoors and practicing yoga.
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