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Washington, D.C. – Congressman Gene Green (D-Houston), on Wednesday November 1st, along with Congressman Kevin Brady (R-Woodlands) held a press conference where they discussed new legislation under the Pension Protection Act, which would ensure that retiring firefighters are not penalized for withdrawing from their well earned pension.
The event took place at 10:30AM at the HFRRF Building located at 4225 Interwood North Parkway, Houston, Texas. Congressmen Green and Brady presented a copy of the legislation, a “red line”, to Chairman of the Board of the Houston Firefighters’ Relief and Retirement Fund (HFRRF) Jimmie Gill.
Congressmen Green and Brady teamed up with Houston Firefighters in securing legislation that ends a penalty local fire fighters face at retirement. The “fix” was included in the Pension Protection Act passed by Congress and signed into law by the President of the United States earlier this year.
Congressman Brady and Green presented a framed “red-line” signed copy of the legislation critical to firefighters at the press conference.
Background on Firefighter Pension Problem:
Many public safety personnel begin their careers at a young age and after 20 years of service are eligible for retirement at the pinnacle of their careers. In order to keep these experienced public safety personnel on the job for up to 10 years longer, many retirement plans are offering an alternative pension plan option called the Deferred Retirement Option Plans (DROP). Under previous law, eligible public safety personnel would be forced to pay a 10% early withdrawal tax penalty for taking distributions from a DROP plan before age 59 ½.
For example, in Houston the average firefighter begins his career at age 23. After 20 years of service, now age 43, the average firefighter is fully vested in the regular pension fund and can retire and begin receiving benefits immediately. Today, the firefighter can participate in the DROP. If the firefighter participates for the full 10 years and then elects to retire, he or she will be age 53 and, in general, will not be able to take retirement distributions prior to the age of 59 ½ without triggering a 10 percent tax penalty for early withdrawals.
The bill sponsored by Congressmen Brady and Green provides relief from the 10% early withdrawal penalty faced by these public safety personnel.
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