TSP Opposes Bill Prohibiting Investments in China and Russia

Congressman Jim Banks (R-IN) introduced legislation last week that would prevent Thrift Savings Plan (TSP) funds from being invested in Chinese and Russian companies.

Currently, the Thrift Savings Plan’s I-Fund invests in the economies of allied nations.

However, in November 2017, the Federal Retirement Thrift Investment Board changed the international fund (the I-Fund index) to the MSCI ACWI Index, to be enacted in 2020, which allows the resources of the TSP to be invested in adversarial nations, principle among them China and Russia.

“The governments of Russia and China have a long history of malicious activity against the United States. If we are to confront the growing threats from these hostile countries, we should not be supporting their economies financially,” said Banks. “This common-sense legislation would prevent federal money from entering countries that are actively attempting to undermine our global leadership.”

According to a press statement from Banks, the legislation (HR 2903) would do the following:

• Prevents the investment of TSP funds from being invested in China and Russia
• Will have no impact to the current structure of the TSP
• Forces the Investment Board to reevaluate their choice of index funds for the I-Fund to one of many that are both financial lucrative and do not support threatening economies

Banks said the legislation will have no budget impacts. Additionally, it would “have no impact on the low service fees and historical high financial returns for plan participants, which makes the TSP the preeminent retirement plan for federal government employees. ”

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TSP Opposes Legislation

According to a report from GovExec.com this week, TSP spokeswoman Kim Weaver said the agency would oppose the legislation under consideration:

“It is intended, and I’m quoting, ‘to force the [Federal Retirement Thrift Investment Board] to re-evaluate its choice of index funds for the I Fund,’ ” Weaver said. “I did have conversations with staff prior to its introduction, and what we’ve learned is that if the federal government, or an entity of the federal government, takes action against a foreign company, [the operator of the new investment index] would remove them from the investment index. We’ve provided that information to staff, but the bill is something that we’d likely oppose.”