Senators Marco Rubio (R-FL) and Rick Scott (R-FL) sent a letter to President Trump asking him to replace members of the Federal Retirement Thrift Investment Board (FRTIB) after what they call “their short-sighted — and foolish — decision” to steer federal retirement savings to opaque Chinese firms engaged in human rights abuses and a wide range of military-related activities.
In November 2017, the FRTIB changed the international fund (the I-Fund index) to the MSCI ACWI Index, to be enacted in 2020, which allows the resources of the Thrift Savings Plan (TSP) to be invested in adversarial nations, principle among them China and Russia.
Senators Rubio, Jeanne Shaheen (D-NH), and Scott introduced the bipartisan, bicameral Taxpayers and Savers Protection (TSP) Act, which would prevent the FRTIB from moving forward next year.
The Senators warned that FRTIB’s decision will effectively use these retirement savings to fund the Chinese government and Communist Party’s efforts to undermine U.S. economic and national security. According to Rubio and Shaheen, the decision will expose nearly $50 billion in retirement assets of federal government employees, including members of the U.S. Armed Forces, to “severe and undisclosed material risks” associated with many of the Chinese companies listed on the MSCI ACWI Index.
But after the Board decided to move forward with the decision, FRTIB chairman Michael Kennedy and the Employee Thrift Advisory Council’s chairman, Clifford Dailing, published an article this week in Government Executive defending the change to the I Fund.
“TSP funds are solely the property of plan participants — it is not federal money and it is not taxpayer money,” wrote Kennedy and Dailing. “Choices on how to invest in the TSP funds belong solely to the participants. The FRTIB is required by Congress to make decisions that are in the best interest of all TSP participants, and not consider issues better left to other federal entities.”
The full text of the letter to President Trump is below:
November 22, 2019
Dear Mr. President:
It has come to our attention that the agency under your Administration that is responsible for investing the retirement savings of federal employees, including members of the U.S. Armed Forces, has decided to expose nearly $50 billion of their savings to investments in Chinese companies under the control of the Communist Party of China. This decision by the Federal Retirement Thrift Investment Board (FRTIB) to invest the Thrift Savings Plan’s (TSP’s) international fund in an index which includes newly-registered Chinese companies ignores a previous request from Congress to act more prudently with civil servants’ savings.
While your Administration continues to take important and necessary steps to enforce fair trade laws against Chinese companies that have for too long stolen American jobs and innovations, the FRTIB’s decision forces the U.S. government to invest in them. We are extremely disappointed in the FRTIB for ignoring the concerns of Congress and putting the savings of so many hardworking Americans at risk.
There is no reason American taxpayer dollars should be used to prop up failing companies under the control of the Chinese Communist Party, which continues to steal our technology, abuse human rights and build up its military to compete with us.
The FRTIB is comprised of five members appointed by the President and confirmed by the U.S. Senate. We write to you today to request you utilize your executive authority to immediately seek new qualified applicants to serve on the FRTIB, and replace the current members whose terms have expired. These individuals have the responsibility to wisely invest taxpayer dollars, and their decision to support Communist China raises grave concerns regarding those investments. We need leaders who will stand up for human rights and protect the retirement interests of our great federal employees.
We appreciate your attention to this matter. Congress is working hard to make sure taxpayer dollars are not invested in Communist China, and is prepared to act to protect the American people. We are co-sponsors of the bipartisan, bicameral Taxpayers and Savers Protection (TSP) Act, which would prevent the FRTIB from steering federal retirement savings to Communist China, and we will continue to work with our colleagues to pass this important legislation. In the meantime, we ask that you protect the retirement savings investments of our federal employees and work to quickly replace the members of the Federal Retirement Thrift Investment Board whose terms have expired.
Senator Marco Rubio (R-FL)
Senator Rick Scott (R-FL)