FORWARD Act

The FORWARD Act would let certain former military personnel—specifically, those who are entitled to retired pay under chapter 71 of title 10 or those receiving 100 percent disability compensation under 38 U.S.C. 1114 and who are not currently federal employees—continue saving in the Thrift Savings Plan (TSP) after they separate from the uniformed services. Eligible individuals could elect to contribute a portion of their retirement pay or disability compensation to the TSP, using the same election process as active federal employees (section 8432(b)). The bill also bars any government contributions to these individuals’ TSP accounts under this provision and requires that the contributor already had a TSP account before separation. Implementing regulations would be issued within 180 days of enactment, developed by the Federal Retirement Thrift Investment Board in coordination with the Department of Defense and the Department of Veterans Affairs. In short, the bill creates a pathway for certain retirees and severely disabled veterans to continue building retirement savings in the TSP from their ongoing retirement pay or disability payments, but it does not change government matching or automatic contributions for these former personnel and imposes prerequisites and regulatory steps.