Q. I’ve been with the government for 32 years and have based my TSP contributions on having the special retirement supplement when I’m eligible to retire in six years. Can Congress approve the budget and eliminate something that’s been promised to millions of federal employees just like that? This seems like a breach of contract and illegal. Am I wrong about that? Wouldn’t current employees have to be grandfathered in?
A. It would neither be a breach of contract nor illegal. Since Congress passed the law that provided this benefit, it can pass another law that takes it away. However, based on past experience, if it does eliminate that benefit, it’s more likely that the change wouldn’t go into effect immediately. Further, it might exempt those with a particular combination of age and service.