5/3/11: Unless Congress acts in the very near future, the federal government will soon come up against a statutory limitation on its borrowing authority to pay obligations it has already incurred. The Treasury Department has notified Congress that it intends to begin borrowing from federal pension funds on May 16, in order to meet financial obligations until legislation increasing the debt ceiling is enacted.

Current law allows the Treasury Secretary to use funds that are dedicated to the Civil Service Disability and Retirement Fund and the G Fund of the Thrift Savings Plan to pay debts in a situation where the debt ceiling has been reached.  The law also requires that the pension funds be fully restored with no negative consequences once the debt ceiling is increased.  In addition, we have been in contact with the Treasury Department and other Administration contacts and have been assured that all funds and interest will be restored and those with entitlement to these funds will be made whole with no negative impact as has happened previously.  There also will be no impact on the availability of pension payments or access to TSP funds during this time.  It is our understanding that the Administration is planning to distribute an all employee message explaining this situation in the near future.

NTEU strongly believes that Congress should act quickly to pass debt ceiling legislation so the necessity of borrowing from federal pension funds can be avoided.  We will provide you with additional information as it becomes available.