Congress, Political Objectives, and Your TSP

Should the TSP be used as a way to achieve social and political objectives?

Periodically, there is legislation pending in Congress to create a new fund in the Thrift Savings Plan (TSP) or to alter the structure of the TSP in some way. A recent article on FedSmith (See “Climate Choice” and Your TSP Investments) highlighted some of the proposals that have been made to create changes in the TSP.

The latest proposal is to create a TSP fund concerning “climate chaos.” The legislation, entitled Retirement Investments for a Sustainable Economy (RISE) Act, would create a new TSP fund that will “divest from the fossil fuel industry. For the first time, this bill will give millions of federal employees the power to ensure their retirement funds are invested in a more sustainable, socially responsible investment portfolio.”

Other relatively recent investment changes introduced in Congress include creating a TSP fund to ensure gender diversity and empowerment of women; legislation that would allow federal employees to make socially responsible investments (SRI); or a similar bill entitled the “Federal Employee Socially Responsible Investment Act” creating a new investment option in which only “socially responsible companies” would receive money from the TSP.

Other politically inspired proposals have included creating actively managed funds to provide more opportunity for investment advisors in minority-owned companies, avoiding investments in South Africa and Northern Ireland, and to back minority-owned businesses with TSP money.

In the past, none of these options has passed into law.

FedSmith Survey

Our survey on this topic is now closed, but you are welcome and encouraged to discuss the topic in the comments below. Also be sure to read about the survey results: Involve Congress in Your TSP Investments?

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47