Senator Marco Rubio (R-FL) is now taking his battle of the TSP’s I Fund to the White House. He has requested that President Trump replace some of the members of the Federal Retirement Thrift Investment Board (FRTIB) whose terms are expiring because of their decision to change the underlying index tracked by the I Fund.
Whether you agree with Rubio’s position or not, you have to give him credit for being relentless on this issue. First he sent two letters to the FRTIB, then introduced legislation to block the change to the I Fund, then he asked the Senate to consider the legislation on an expedited schedule, and now, he just wants to remove the members who made the decision from their positions at the FRTIB.
So why all this consternation from Rubio over the change to the I Fund index?
He maintains that because the new stock index it will be tracking contains Chinese companies it will be harmful to the interests of the United States and also to federal employees who may have their money invested in the I Fund.
“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,” wrote Rubio in his recent letter to the president.
Senator Rick Scott (R-FL) co-authored the letter with Rubio. The full text of their letter is included below.
Michael Kennedy, the chairman of the FRTIB, came out with an editorial on the situation in which he defended the decision and responded to critics, and it was quite likely that Rubio was the primary intended audience of the article. Kennedy said that the FRTIB was doing its fiduciary duty to the federal workforce by making the change, federal employees stand to get better returns from the alternate index, and the change puts the TSP more in line with what other large companies and government contractors are doing.
So what do you think? Is Rubio right, or is the FRTIB right? Will this change to the I Fund be good or bad for TSP participants?
We’ve seen political battles involving the TSP before, but none that have reached this level that I can recall. It will be interesting to see how it all plays out.
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)