TSP And National Security Concerns
Most federal employees and military service members are already familiar with the Thrift Savings Plan (TSP). It is a retirement and investment plan similar to a 401(k) and is only available to these employees (and their beneficiaries).
Some of this retirement savings money could be controlled by companies linked to the Chinese Communist Party (CCP) and threaten the United States’ national security.
Marco Rubio is a Republican senator from Florida. This issue has been critical to him for a number of years as reflected by the bills he has supported addressing the issue. In the latest bill, Senator Rubio, along with Rick Scott (R-FL), Joni Ernst (R-IA), Josh Hawley (R-MO), and Jeanne Shaheen (D-NH) are trying to prevent this from occurring with a bill reintroduced this month.
The Taxpayers and Savers Protection (TSP) Act, would ban the Federal Retirement Thrift Investment Board (FRTIB), the board that manages the TSP, from investing federal retirement savings in China and other countries considered adversaries of the U.S., such as Russia, Iran, and North Korea.
Concerns Underlying Legislative Proposal
According to Senator Rubio, it is “absolutely unacceptable” that the CCP and its government continue to profit from the retirement accounts of U.S. government employees and military personnel. He said Congress cannot “sit on the sidelines and allow the TSP Board to fund Beijing’s rise at the expense of our nation’s future prosperity and national security interests.”
Senator Ernst stated: “The Chinese Communist Party and our adversaries in Russia, North Korea, and Iran must not be permitted to profit from the retirement accounts of our military personnel and government employees. I won’t sit idly by as U.S. dollars bolster communists and dictators.”
This latest bill on the topic:
- Would prohibit the TSP from investing in companies listed on the exchanges of a country of concern, headquartered in a country of concern, or substantially controlled by a country of concern.
- Identifies countries of concern based on the Office of the Director of National Intelligence’s annual threat assessment. Those countries are China, Iran, North Korea, and Russia.
Previous Legislation to Stop Funneling Retirement Savings to China
This is not the first time Senator Rubio has introduced legislation to stop the TSP Board from funneling federal retirement savings to China.
In 2019, he led a bipartisan group of lawmakers in urging the board to reverse its decision to move billions of dollars from a TSP fund that tracks domestic companies to one that tracks international companies. Some of these companies are sanctioned by the U.S. government or involved in human rights abuses, espionage, or military activities against U.S. interests.
In 2020, he and Senator Jeanne Shaheen (D-NH) welcomed the board’s decision to halt the transfer of federal retirement savings to China after pressure from Congress and the Trump administration. However, they also warned that “the threat posed by Beijing remains” and that they would continue to monitor the board’s actions.
Senator Rubio has previously introduced another bill, the TSP Fiduciary Security Act. This bill would update the board’s fiduciary duty to include national security considerations. The bill would prevent the board from investing in Chinese military companies and companies on the Department of Commerce Entity List and from making proxy votes that would harm U.S. national security assets.
The TSP Fiduciary Security Act has not been passed by Congress. Senator Rubio said he would keep working to ensure that “the Board and their friends on Wall Street will get away with using American service members’ savings to fund threats to U.S. national security.”
Whether these concerns will make a difference in getting the latest Rubio bill on this issue through Congress remains to be seen. In the past, FRTIB spokeswoman Kim Weaver said, “Our basic premise is that if it is legal for any other Americans to invest, it should be legal for TSP participants.” This quote is similar to an earlier quote from former FRTIB Chairman Michael Kennedy on the issue of the TSP investing in Chinese companies.
The issue has not been a priority or significant concern for Democrats or the Biden administration. While the House may pass a bill like this, it is unlikely to pass in the Senate.