A bill introduced last Friday by Rep. Michael Waltz (R-FL) would ban the Federal Retirement Thrift Investment Board (FRTIB) from steering military and federal employees’ retirement contributions in the Thrift Savings Plan to China.
According to Waltz, a combined 5.6 million of military members and federal employees contribute to the TSP every month. The specific portion of the TSP in question is the plan’s I Fund which has $50 billion in assets.
Currently, the I Fund doesn’t include developing economies, however, last year the FRTIB board approved a change to this fund – scheduled to go into effect later this year – to adopt the All Countries Index, which includes China and Russia. Waltz says the rule change forces the FRTIB to invest more than $3 billion of military and federal employees’ retirement funds in state-owned firms directed in China.
The current index for the TSP’s I Fund is the MSCI EAFI which is designed to measure the stock market performance of developed markets outside of the U.S. and Canada and includes more than 600 mid-sized and large companies.
“It is absolutely crazy for our military and federal employees to be indirectly contributing to China’s military operations – and what’s worse is that nearly all of these people are completely unaware of this situation,” Waltz said. “Imagine sending our brave soldiers overseas to fight against our enemies and then telling them they have been footing the bill for a country like China’s military operations. This is completely unconscionable and needs to stop.”
Last August, Senators Marco Rubio (R-FL) and Jeanne Shaheen (D-NH), members of the Senate Committee on Foreign Relations, urged the chairman of the FRTIB to reverse its November 2017 decision to change TSP’s I fund investments.
The House bill — the Taxpayers and Savers Protection Act — was originally sponsored by former U.S. Rep. Mark Meadows (R-NC), who now serves as President Trump’s Chief of Staff. The bill has 19 original cosponsors and has been referred to the House Committee on Oversight and Reform.
To read the full text of the bill, go here.