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: Sen. Toomey, Patrick [R-PA]
Target Audience
Population: State and local government corrections officers
Estimated Size: 410000
- Current federal public safety officers already have this exemption, implying a smaller group when extended to state and local levels.
- There are approximately 410,000 correctional officers in the United States.
- This figure includes both state and local corrections officers, who are the specific targets of this bill.
- The global estimate doesn't necessarily apply as this bill is specific to US-based individuals.
Reasoning
- About 1% of the 410,000 correctional officers in the US could be in financial situations where an early withdrawal option would provide significant value, which fits the budgetary constraints of the policy.
- The policy may not heavily impact all officers, as some may not need early withdrawals or be near retirement age, but it can provide a crucial option for those in pressing financial circumstances.
- In terms of wellbeing, the ability to avoid penalties on early withdrawals can notably support a person's financial security, particularly for those nearing retirement or facing unexpected financial hardships.
- Some officers may not see an immediate impact on wellbeing unless they actually plan to or need to make withdrawals soon.
Simulated Interviews
State Corrections Officer (Phoenix, AZ)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- This will make retiring early more feasible for me.
- I feel more secure knowing I have this additional financial flexibility.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Local Corrections Officer (Detroit, MI)
Age: 52 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- I've been worried about my health costs; this policy helps.
- Knowing I can use my retirement funds without penalty if needed is a relief.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
State Corrections Officer (Jacksonville, FL)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Policy is useful, but I don't plan to withdraw early myself.
- It's good policy, supporting officers who really 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 | 7 | 7 |
Local Corrections Officer (San Antonio, TX)
Age: 60 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This is a timely policy for me as I plan to retire soon.
- Without penalties, my retirement planning feels less rigid.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
City Corrections Officer (Chicago, IL)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I'm young, not thinking about retirement now.
- Policy seems more suited for older colleagues or those with financial emergencies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
State Corrections Officer (New York, NY)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 6/20
Statement of Opinion:
- This policy gives me confidence to address emergencies with my retirement fund.
- It's nice knowing there is a safety net if things get financially tight again.
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 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Local Corrections Officer (Los Angeles, CA)
Age: 48 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I'm not sure I'll use this policy, but it's good to have the option.
- Right now, it's not in my plan to make early withdrawals.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
State Corrections Officer (Portland, OR)
Age: 36 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- This policy doesn't immediately apply to me, but it's reassuring.
- It could be a benefit if unexpected expenses arise.
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 | 7 |
Local Corrections Officer (Miami, FL)
Age: 55 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This policy alleviates financial stress of going it alone after my spouse's passing.
- It feels like a financial lifeline for my upcoming transition to retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 6 | 4 |
State Corrections Officer (Houston, TX)
Age: 42 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- Good to have access to funds if my business needs it.
- May not use it now, but it's excellent planning support.
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 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Cost Estimates
Year 1: $20000000 (Low: $10000000, High: $40000000)
Year 2: $24000000 (Low: $12000000, High: $48000000)
Year 3: $29000000 (Low: $14500000, High: $58000000)
Year 5: $35000000 (Low: $17500000, High: $70000000)
Year 10: $45000000 (Low: $22500000, High: $90000000)
Year 100: $70000000 (Low: $35000000, High: $140000000)
Key Considerations
- The policy aims to extend an existing federal public safety officer benefit to state and local officers, potentially increasing their financial flexibility.
- It may lead to an increase in early withdrawals among eligible officers, affecting retirement savings retention.