Marco Rubio has been against TSP investing in China for the past 3 years – and his efforts continued by proposing legislation.
Back in 2020, the Federal Retirement Thrift Investment Board (FRTIB) was set to switch the market index that the I-Fund tracks. While the current index only allows for investments in a handful of countries, the updated index would’ve allowed for investments across the globe… and that included China. Along with a few other politicians, the Republican Senator from Florida, Marco Rubio, made political objections to the move. As there’s been no mention from the FRTIB about switching the I-fund’s index since. The idea has been essentially abandoned since the summer of 2020.
Then in 2021, the Florida Senator first proposed the TSP Fiduciary Act – which would adjust the TSP board’s fiduciary duty and prevent any investments in Chinese companies. The introduced legislation was never considered by a vote.
Although the I-fund’s index doesn’t look to be changing soon, the FRTIB did open up the mutual fund window in June of last year, essentially giving TSP investors the option to invest in around 5000 more mutual funds (albeit with some caveats) – and some of these funds contained Chinese companies. Rubio tried to delay the opening of the window so the FRTIB could remove all the options that contained Chinese companies. The TSP’s board did not comply with the Senator’s wishes, prompting the Senator to send a second letter a few months later. The FRTIB has repeatedly responded to Rubio’s concerns claiming national security concerns regarding financial organizations are to be handled by OFAC (Office of Foreign Asset Control) and not the FRTIB.
With a new Congress convened, the Florida legislator has reintroduced the bill originally brought forth two years ago. If passed, it would enact the following:
Along with their argument that such matters are already handled by OFAC, the FRTIB has also noted that restricting millions of TSP participants’ investment choices with regulations that don’t apply to any other defined contribution plan (like private 401ks), or any other financial institution, isn’t fair. Their recent response to the reintroduction of the TSP Fiduciary Act echoed their previous arguments, stating that inserting policy decisions into their fiduciary responsibility is nonsensical because the two are “fundamentally incompatible.”
—-
Until Next Time,
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
Marco Rubio has been against TSP investing in China for the past 3 years – and his efforts continued by proposing legislation.
Back in 2020, the Federal Retirement Thrift Investment Board (FRTIB) was set to switch the market index that the I-Fund tracks. While the current index only allows for investments in a handful of countries, the updated index would’ve allowed for investments across the globe… and that included China. Along with a few other politicians, the Republican Senator from Florida, Marco Rubio, made political objections to the move. As there’s been no mention from the FRTIB about switching the I-fund’s index since. The idea has been essentially abandoned since the summer of 2020.
Then in 2021, the Florida Senator first proposed the TSP Fiduciary Act – which would adjust the TSP board’s fiduciary duty and prevent any investments in Chinese companies. The introduced legislation was never considered by a vote.
Although the I-fund’s index doesn’t look to be changing soon, the FRTIB did open up the mutual fund window in June of last year, essentially giving TSP investors the option to invest in around 5000 more mutual funds (albeit with some caveats) – and some of these funds contained Chinese companies. Rubio tried to delay the opening of the window so the FRTIB could remove all the options that contained Chinese companies. The TSP’s board did not comply with the Senator’s wishes, prompting the Senator to send a second letter a few months later. The FRTIB has repeatedly responded to Rubio’s concerns claiming national security concerns regarding financial organizations are to be handled by OFAC (Office of Foreign Asset Control) and not the FRTIB.
With a new Congress convened, the Florida legislator has reintroduced the bill originally brought forth two years ago. If passed, it would enact the following:
Along with their argument that such matters are already handled by OFAC, the FRTIB has also noted that restricting millions of TSP participants’ investment choices with regulations that don’t apply to any other defined contribution plan (like private 401ks), or any other financial institution, isn’t fair. Their recent response to the reintroduction of the TSP Fiduciary Act echoed their previous arguments, stating that inserting policy decisions into their fiduciary responsibility is nonsensical because the two are “fundamentally incompatible.”
—-
Until Next Time,
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
The FedLife Podcast is your in-depth, biweekly deep dive into the world of federal benefits and retirement planning. Hosted by federal benefits expert Ed Zurndorfer and Dan Sipe of Serving Those Who Serve, each 30-minute episode unpacks the complexities of FERS and CSRS retirement, FEHB and Medicare, survivor benefits, tax planning, and more. Designed for federal employees and retirees who want more than just the basics, FedLife goes beyond the headlines to explore the rules, nuances, and strategies that can make a meaningful difference in your retirement. Remember: it’s your Fed life, make it a great one.
The Fed15 Podcast is your weekly 15(ish)-minute briefing on federal benefits and financial planning, built specifically for federal employees and retirees. Hosted by Dan Sipe and Katelyn Murray of Serving Those Who Serve, each episode delivers clear, actionable guidance on topics like FERS and CSRS retirement, TSP strategies, FEHB, survivor benefits, tax planning, and more! Whether you’re five years from retirement or already there, The Fed15 helps you cut through the noise, avoid costly mistakes, and make confident decisions about your federal benefits.
