In Proposed TSP Changes: For Better or Worse?, FedSmith asked readers several questions about proposals to make significant changes to the federal government’s Thrift Savings Plan (TSP).
Divesting Fossil Fuels from the TSP
A statement in a recent article in the New Yorker magazine read: “Federal workers are getting fed up with dirty fuels lurking in their nest eggs.” The magazine cited as a source for this statement an attorney with the Environmental Protection Agency (EPA). She told the New Yorker,”I bring cases against polluting corporations. Right now, my employer, the federal government, forces me to invest in the very companies that imperil my children’s future by pumping greenhouse gases into the air.”
The article urges President Biden to issue an Executive Order banning fossil fuel companies in the TSP. The article states:
Biden has the chance to atone for the sins of his forebears and build up some serious street cred on climate. Using his executive authority to divest the T.S.P. will help him go down as the first real climate President.
There is also a bill in Congress to accomplish the same objective through the legislative process.
Expanding the TSP to Millions of Americans
Another proposal involving the Thrift Savings Plan is to expand the TSP program to millions of Americans and to provide a government match to create more wealth in the country—especially among those with a lower income.
Do Federal Employees Support These Changes in the TSP?
What do federal employees think? Do they support these and similar proposals to alter the TSP?
By a large margin, those responding to the survey were opposed to the proposed changes.
In the survey taken last week, 2,383 readers submitted their reaction to the changes. Here are the questions and the results.
Would you favor opening the TSP to all Americans and providing a government match to these accounts, especially those in lower income groups?
- Yes: 17%
- No: 83%
Are you in favor of an executive order from the president requiring the TSP to divest all fossil fuels from its investments?
- Yes: 7.3%
- No 92.7%
Does Congressional involvement in making TSP policy make you more or less confident in the security of your TSP retirement funds?
- More Secure: 1.5%
- Less Secure: 93.3%
- No Difference: 5.2%
Should a president have authority to decide whether fossil fuels are appropriate investments for the TSP?
- Yes: 4.5%
- No: 95.5%
Do you support the bill in Congress to require the TSP to divest fossil fuels from TSP investments?
- Yes: 7.3%
- No: 92.7%
Do you favor that the TSP investing in “socially responsible” companies only?
- Yes: 11.6%
- No: 88.4%
While there is little doubt about the enthusiasm of some politicians or activists with proposals to implement policies to inhibit climate change or social changes using the power of the $723 billion in the TSP, they are not well received by those for whom the plan was created.
A proposal urging the president to issue an executive order banning fossil fuels in the TSP or a bill to accomplish the same objective had the least support (4.5%) while a general question about proposals to have the TSP invest in socially responsible companies only received the support of 11.6% of those responding. 17% of respondents were in favor of using the TSP model to provide financial support with a government match, particularly for those in lower income groups.
As can be seen from the large margins opposed to these types of proposals, there is likely to be strong opposition from the federal community. As is often the case, the “devil is in the details” on proposals to make major changes to the financial future of people who would be impacted by a proposed change.
To date, while some of these proposals will receive support from interest groups and some political constituents, there is likely to be strong opposition from those who would potentially have the funds for their future retirement income used to support these political objectives.