Bill Overview
Title: State and Local Corrections Officer Retirement Fairness Act of 2022
Description: This bill extends the exemption from the penalty for early withdrawals from tax-exempt retirement plans currently allowed to federal public safety officers to certain state and local government corrections officers.
Sponsors: Rep. Kildee, Daniel T. [D-MI-5]
Target Audience
Population: State and Local Government Corrections Officers
Estimated Size: 380000
- This bill affects corrections officers who work at state and local levels instead of federal levels.
- The U.S. has approximately 420,000 corrections officers working at various levels of government.
- The global number of corrections officers, including those at federal, state, and local levels, is in the millions, but the bill targets state and local, which would be a significant portion of the national total.
- Only those corrections officers who would consider early withdrawal from retirement funds would be directly affected within this occupation group.
Reasoning
- The target population is corrections officers at the state and local level, estimated to be 380,000.
- Not all these officers will consider or need early withdrawal from their retirement plans, which affects the relevance of the policy for them.
- The budget constraints suggest that while there is broad potential coverage, only a subset will likely be directly impacted initially.
- Those nearing retirement or facing financial challenges may be more inclined to utilize this policy.
- Individuals with better financial literacy or alternative financial safety nets may see little impact from this policy.
Simulated Interviews
Corrections Officer (Texas)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- This policy is great for those of us looking to retire a bit sooner due to the stressful nature of our job. The financial flexibility is a huge relief.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Corrections Officer (California)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Finally, some fairness for local officers like myself. I was worried about penalties if I needed early funds.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Corrections Officer (Florida)
Age: 35 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 20/20
Statement of Opinion:
- While I might not use this, I think it's a good backup option for emergencies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 6 |
Corrections Officer (New York)
Age: 55 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 8/20
Statement of Opinion:
- This changes everything for my retirement plans. I was worried about penalties, but now I'm more relaxed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 8 | 4 |
| Year 5 | 9 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 6 | 4 |
Corrections Officer (Illinois)
Age: 40 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- It's good to know I have options, but I'm not planning to retire soon. Still, it's a nice safety net.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Corrections Officer (Ohio)
Age: 30 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- This policy doesn't benefit me much right now, but it might in the future.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 7 |
Corrections Officer (Georgia)
Age: 42 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- This policy is a lifesaver, allowing me to manage my finances without incurring penalties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Corrections Officer (Arizona)
Age: 37 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 15/20
Statement of Opinion:
- This new rule gives me some peace of mind about my finances after my divorce.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Corrections Officer (Nevada)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- I think it's important to have this policy, though I hope never to need it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 6 |
Corrections Officer (Michigan)
Age: 48 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Access to early retirement withdrawals without penalties helps cover medical expenses and offers some financial stability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Cost Estimates
Year 1: $200000000 (Low: $150000000, High: $250000000)
Year 2: $204000000 (Low: $153000000, High: $255000000)
Year 3: $208080000 (Low: $156060000, High: $260100000)
Year 5: $216343200 (Low: $162257400, High: $270429000)
Year 10: $237267049 (Low: $178000000, High: $296500000)
Year 100: $525556069 (Low: $394000000, High: $657000000)
Key Considerations
- The policy provides financial flexibility for corrections officers needing early access to retirement funds, likely for emergency financial needs.
- Potential increase in the retirement savings withdrawals could influence long-term retirement security for affected officers.
- State and local governments might experience administrative costs related to policy implementation, though largely marginal.
- Behavioral economics suggest that increased early withdrawals might reduce overall retirement fund sustainability.