Rationale: Section 1.401(a)-1(b)(2)(v) of the 2007 regulations provides that in the case of a plan where substantially all of the participants are qualified public safety employees (within the meaning of § 72(t)(10)(B)), a normal retirement age of age 50 or later is deemed not to be earlier than the earliest age that is reasonably representative of the typical retirement age for the industry in which the covered work force is employed. The National Guard should fall into this category and this change would allow all (traditional, dual status technician, AGR) access to their TSP if retired after age 50, 10% penalty free.

The 10% penalty is by design meant to discourage individuals from cashing out their retirement early. In the case of National Guardsmen, Age 50 and higher is a normal retirement age.

Cost is neutral and possibly positive for the Government. Case for neutral: the 10% early withdrawal penalty wasn't put into place to generate funds, rather to discourage individuals from accessing their TSP (IRA) prior to retirement age.

Case for Positive savings to the Government: Collecting TSP funds on retirement counts as income and will reduce or eliminate eligibility for unemployment funds.