Keep Your Hands Off My TSP!

Readers have strong opinions about Congressional involvement in the TSP and fear that the pot of money is an irresistible temptation for lawmakers.

The articles on the FedSmith site that generate the most interest are usually those that deal with the forthcoming pay raise for the next year. Every other issue pales in comparison–at least until now.

An issue that is near and dear to the hearts of FedSmith readers is their Thrift Savings Plan.

Last week we ran an article about Congressional involvement in the Thrift Savings Plan. Specifically, a California Congresswoman wants to help others less fortunate than ourselves by using the power of all that money sitting in the TSP funds. As we asked in the original article, who among us would not want to help the beseiged people of Darfur? A new bill in Congress bill would require congressional auditors to investigate the extent of TSP investments in companies that have directly or indirectly had a business relationship with those committing genocide in Darfur and send a report for Congress listing these companies.

Perhaps, as suggested by a few Congressmen such as Barbara Lee (D-CA), Congress should start telling the TSP folks which companies are acceptable to invest in and which companies are not acceptable.

We asked readers their opinion on several issues surrounding Congressional involvement in the Thrift Savings Plan. About 1500 readers weighed in with an opinion.

Perhaps, with the public opinion of Congressional ethics hovering in polls at about the same level of trust we would give to the average used car salesman trying to unload a junker, readers are nervous when it comes to trusting their retirement funds to our nation’s elected representatives.

Numerous readers cited problems with the Social Security system as an example of what could happen to their TSP once Congress decides to make use of the money. An overwhelming majority said that having Congressional involvement makes them less confident about the security of their TSP funds.

Most readers also oppose the bill in Congress to investigate the extend of TSP investments in companies involved in the genocide in Darfur. Based on the comments sent in by readers, for most, their opinion is rooted in the belief that once Congress gets more involved in how their TSP money is invested, it won’t stop with one GAO report.

Some readers would prefer to see the TSP investing only in “socially responsible” companies. Most opposed this concept. It isn’t that those opposing it see “socially responsible” investing as a bad thing. Several readers commented that their fear was creating a fund that was based on social responsiblity would become a catch-all for “politically correct” causes depending on who controlled the vote in Congress. The fear of many readers is that their retirement future would go down the drain while the billions invested in the TSP would be used to enhance political causes rather than returning money to investors.

Here are the results of the latest survey:

Does Congressional involvement in making TSP policy make you more or less confident in the security of your TSP retirement funds?

  • More Secure: 3%
  • Less Secure: 89%
  • No Difference: 5%
  • Undecided: 3%

Do you support the bill in Congress to investigate the extent of TSP investments in companies directly or indirectly involved in the genocide in Darfur?

  • Yes: 31%
  • No: 57%
  • Undecided: 11%

Should Congress decide which companies are acceptable for TSP investments?

  • Yes: 2%
  • No: 94%
  • Undecided: 4%

Would you prefer to see the TSP invest only in “socially responsible” companies?

  • Yes: 22%
  • No: 64%
  • Undecided: 14%

Here is the underlying rationale in readers’ own words for the opinions expressed in the poll.

A meteorologist with the Dept. of Commerce in Springfield, MO wrote: “Neither the congress, nor any other governing branch of government, should be involved in tampering with investments withing the TSP program.
I would like to think that pulling money away from companies that may fund inexcusable acts by dictatorial and oppressive governments would help. But, if history has told us anything, evil is as evil does. I really would like to think that pulling some money would ultimately result in the stoppage of the genocide in Darfur…but it just doesn’t work that way.”

A technical expert with SSA in Elizabeth, NJ commented: “The TSP is not the vehicle to make political statements about genocide in Darfur or anything else going on in the world. Anyone wishing to do so can invest their other money in any one of many mutual funds specifically set up to only invest in what that fund deems to be socially responsible investing.”

A former (now retired) HHS employee in Silver Spring, MD offered this view: “Congress should leave well enough alone! Their involvement can only ensure more problems and partican impact on what’s been a good thing.”

An economist with the Forest Service in Ft. Collins, CO has a strong opinion: “It’s bad enough that we have those bozos in Congress making national policy. Keep them (far, far) away from the TSP funds!!!”

A program analyst with the Navy in Kingsville, TX echoes that view: “I’ve yet to see Congress get involved in anything that they didn’t ruin in some form or fashion given sufficient time. ”

An industrial hygenist with OSHA who works in Arlington Heights, IL stated: “I want the greatest return possible on my retirement funds. If I’d wanted to invest in a socially responsible fund, I’d have done that instead of investing in the TSP. (I’m in CSRS, so there is no employer match for my funds.)”

A database administrator with DFAS in Indianapolis expressed a concern often expressed by other readers in their written comments: “I’m all for divesting in companies that help Sudan if that will help stop the genocide in Darfur. However, I’m nervous about this policy in general. I don’t want to trust Congress to decide how to invest my money. I’m concerned about “opening the floodgates” to politicization of the TSP.”

An engineering technical with DoD in China Lake, CA is outraged: “I am outraged that our elected officials are willing to diminish OUR SELF-PAID retirement funds for political reasons. If this trend is allowed, what will be the next restriction on TSP investments? Will the TSP be limited to companies with liberal environmental policies or companies that have no subsidiaries that manufacture firearms, tobbacco products, or other politically incorrect merchandise? Whose standards will be used to determine the political correctness of future investments? No, I say now is the time to nip it in the bud. You can bet that I will be writing very strong letters to my representatives on this issue.”

An employee of the VA in Cleveland opined: “I’d much rather my money be invested in index funds than have the people responsable for the national debt deciding what would be “appropriate” for my retirement funds.”

A retiree from the Dept. of Commerce in Frederick, Maryland likes the “golden goose”: “Who can possibly decide what is “socially responsible” investing? What if I don’t agree with their definition? The current simple and basic indexing avoids all these problems. Hands off my retirement money! Congress getting involved in personal employee investment decisions would be the quickest way to kill the current high level of participation in the TSP. Don’t kill the Golden Goose!”

A director from the Social Security Administration in Lexington, KY voiced a concern also voiced by other readers regarding the billions now in the TSP funds: “My concern is that the government may decide to “borrow” funds from the TSP and forget to repay. Also, I would be concerned with the idea that the gov is going to tell me how to invest my money when their is no accountability as to how the gov’t. funds projects. ”

An attorney from Maryland wrote: “While I certainly do not support or condone the genocide in Darfur or any other socially unacceptable behavior by individuals or companies, I prefer that financial investment matters be left to the financial experts and political/social issues be left to the people and those we elect to represent our interests in Congress.”

A biomedical technican with the VA in Clarksburg, WV is concerned: “I’m all for dis-engaging ourselves from companies in countries that are known human rights abusers but I worry that once Congress starts to meddle in the TSP who knows where it will end. There are doubts about the future of Social Security being around in 20 or so years, so I am ever more dependent upon my TSP to be there for me when I retire. Congress gaining access to it, for even a moral and right reason as this still worries me about what else they could do with it.”

A computer specialist with SSA in Baltimore likes index funds: “They might want to make a socially responsible fund available, but should not mess with the already established funds. If an index fund has a so-called “bad” stock in it, and it is removed, you no longer have an indexed fund.”

Out of some 500 opinions sent in, there were several that wrote in support of changing the TSP in some ways. Here are a couple of those views as expressed by readers.

A retired Navy master chief from Louisiana wrote: “Congress is already involved in the TSP; it is part of their retirement too. I hope this will seve to keep the fund solvent and increasing. I think the majority in Congress will see to it that the TSP will be run honestly. It is in their best Interest to.”

An employee with the Corps of Engineers in Kansas City, MO says: “We should never profit from the destruction of others.”

And several readers expressed a view about socially responsible investing that were similar to the comment of this contract specialist from Mechanicsburg, PA: “Set up a separate “socially responsible” fund for VOLUNTARY contributions only. ”

A claims examiner with the Dept. of Labor in Ohio stated: “It is better for Congress to stay out of the TSP. There should be a mechanism for employees to express their opinions and have some say in the allocation of their funds. For example, before joining the Federal government I worked for a university. My TIAA-CREF plan had options that enabled people to choose a socially responsible fund if they wanted to. This is preferable, in my opinion.”

Our thanks to all who chose to participate in our latest poll and a special thanks to those who took the time to send in their written comments on these issues.