Adam Schiff, a Democrat Representative from California, just reintroduced a bill of his own: the Federal Employees Sustainable Investment Act, which would add a sixth TSP fund to the existing five (G, C, S, I, and F). The new fund would be known as the “corporate responsibility” stock fund but since “C” is taken, would probably be called the “E” fund because it focuses on “ESG” stocks – which stands for Environmental Social Governance. Basically, for a company to be included in the fund, it would need to uphold minimum standards regarding corporate leadership, climate change impact, product safety, human rights, and community relations.
The act is not expected to even be voted on, but there are two important notes to consider. First, of the 10 largest ESG mutual funds (according to Bloomberg), 8 of them underperformed the TSP’s C-fund in 2022, losing more than the C-fund’s -14.8% loss. Second, like Chinese investments, ESG funds are available in the mutual fund window, so TSP participants who really want to invest in such companies via the TSP are able to do so – at least partially.
Instead of aiming for more partisan changes to the TSP, there is still room for improvement in the retirement plan that Congress could redirect their sights toward. Such items could include:
—-
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. **
Led mostly by Senator Rubio of Florida, the Republican side of the US Congress has been focused on removing Chinese investments from the TSP’s offerings. Even though a handful of Senators successfully blocked an index change to the I-fund in 2020, there are still some investment choices that include companies from China in the new mutual fund window, which the Florida Senator has been going after since last summer. His latest attempt was earlier this year when he reintroduced the TSP Fiduciary Act.
On the left side of the government’s legislative branch, the focus on the TSP pertains to climate change and social issues such as ensuring more female and minority fund managers are represented in the TSP’s investment choices. A recent rule from the Department of Labor (DOL) made it so plan managers are “allowed” to consider ESG factors when choosing investments, exercising shareholder rights, and proxy voting. Despite both chambers of Congress passing bills that would eliminate the rule, neither moved forward because the President stated he would veto any such law that made it to his desk.
Adam Schiff, a Democrat Representative from California, just reintroduced a bill of his own: the Federal Employees Sustainable Investment Act, which would add a sixth TSP fund to the existing five (G, C, S, I, and F). The new fund would be known as the “corporate responsibility” stock fund but since “C” is taken, would probably be called the “E” fund because it focuses on “ESG” stocks – which stands for Environmental Social Governance. Basically, for a company to be included in the fund, it would need to uphold minimum standards regarding corporate leadership, climate change impact, product safety, human rights, and community relations.
The act is not expected to even be voted on, but there are two important notes to consider. First, of the 10 largest ESG mutual funds (according to Bloomberg), 8 of them underperformed the TSP’s C-fund in 2022, losing more than the C-fund’s -14.8% loss. Second, like Chinese investments, ESG funds are available in the mutual fund window, so TSP participants who really want to invest in such companies via the TSP are able to do so – at least partially.
Instead of aiming for more partisan changes to the TSP, there is still room for improvement in the retirement plan that Congress could redirect their sights toward. Such items could include:
—-
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. **
Will there be an E-Fund? Read about the latest politicization of the Thrift Savings Plan (TSP) and other possible issues with the retirement plan for feds.
A lesson learned at one point, or another is that bigger isn’t always better, and the biggest certainly isn’t always the best. This goes for defined contribution plans as well, and the TSP is most definitely the world’s largest such plan, in terms of both money held (roughly $750 billion) and participants (a bit less than 7 million).
And there is a lot to like about the TSP. Its core funds track broad market indices and its relatively cheap when it comes to investment costs. But there are some areas for improvement that will probably not be addressed for a while, if at all, because the TSP just underwent a pretty serious renovation last year that brought a new recordkeeper, website, and investment options. Also, Congress, which has the legislative ability to make changes to the retirement savings plan, seems preoccupied with using the TSP for their political goals – on both the GOP and Democrats’ aisles.
Led mostly by Senator Rubio of Florida, the Republican side of the US Congress has been focused on removing Chinese investments from the TSP’s offerings. Even though a handful of Senators successfully blocked an index change to the I-fund in 2020, there are still some investment choices that include companies from China in the new mutual fund window, which the Florida Senator has been going after since last summer. His latest attempt was earlier this year when he reintroduced the TSP Fiduciary Act.
On the left side of the government’s legislative branch, the focus on the TSP pertains to climate change and social issues such as ensuring more female and minority fund managers are represented in the TSP’s investment choices. A recent rule from the Department of Labor (DOL) made it so plan managers are “allowed” to consider ESG factors when choosing investments, exercising shareholder rights, and proxy voting. Despite both chambers of Congress passing bills that would eliminate the rule, neither moved forward because the President stated he would veto any such law that made it to his desk.
Adam Schiff, a Democrat Representative from California, just reintroduced a bill of his own: the Federal Employees Sustainable Investment Act, which would add a sixth TSP fund to the existing five (G, C, S, I, and F). The new fund would be known as the “corporate responsibility” stock fund but since “C” is taken, would probably be called the “E” fund because it focuses on “ESG” stocks – which stands for Environmental Social Governance. Basically, for a company to be included in the fund, it would need to uphold minimum standards regarding corporate leadership, climate change impact, product safety, human rights, and community relations.
The act is not expected to even be voted on, but there are two important notes to consider. First, of the 10 largest ESG mutual funds (according to Bloomberg), 8 of them underperformed the TSP’s C-fund in 2022, losing more than the C-fund’s -14.8% loss. Second, like Chinese investments, ESG funds are available in the mutual fund window, so TSP participants who really want to invest in such companies via the TSP are able to do so – at least partially.
Instead of aiming for more partisan changes to the TSP, there is still room for improvement in the retirement plan that Congress could redirect their sights toward. Such items could include:
—-
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. **
Will there be an E-Fund? Read about the latest politicization of the Thrift Savings Plan (TSP) and other possible issues with the retirement plan for feds.
A lesson learned at one point, or another is that bigger isn’t always better, and the biggest certainly isn’t always the best. This goes for defined contribution plans as well, and the TSP is most definitely the world’s largest such plan, in terms of both money held (roughly $750 billion) and participants (a bit less than 7 million).
And there is a lot to like about the TSP. Its core funds track broad market indices and its relatively cheap when it comes to investment costs. But there are some areas for improvement that will probably not be addressed for a while, if at all, because the TSP just underwent a pretty serious renovation last year that brought a new recordkeeper, website, and investment options. Also, Congress, which has the legislative ability to make changes to the retirement savings plan, seems preoccupied with using the TSP for their political goals – on both the GOP and Democrats’ aisles.
Led mostly by Senator Rubio of Florida, the Republican side of the US Congress has been focused on removing Chinese investments from the TSP’s offerings. Even though a handful of Senators successfully blocked an index change to the I-fund in 2020, there are still some investment choices that include companies from China in the new mutual fund window, which the Florida Senator has been going after since last summer. His latest attempt was earlier this year when he reintroduced the TSP Fiduciary Act.
On the left side of the government’s legislative branch, the focus on the TSP pertains to climate change and social issues such as ensuring more female and minority fund managers are represented in the TSP’s investment choices. A recent rule from the Department of Labor (DOL) made it so plan managers are “allowed” to consider ESG factors when choosing investments, exercising shareholder rights, and proxy voting. Despite both chambers of Congress passing bills that would eliminate the rule, neither moved forward because the President stated he would veto any such law that made it to his desk.
Adam Schiff, a Democrat Representative from California, just reintroduced a bill of his own: the Federal Employees Sustainable Investment Act, which would add a sixth TSP fund to the existing five (G, C, S, I, and F). The new fund would be known as the “corporate responsibility” stock fund but since “C” is taken, would probably be called the “E” fund because it focuses on “ESG” stocks – which stands for Environmental Social Governance. Basically, for a company to be included in the fund, it would need to uphold minimum standards regarding corporate leadership, climate change impact, product safety, human rights, and community relations.
The act is not expected to even be voted on, but there are two important notes to consider. First, of the 10 largest ESG mutual funds (according to Bloomberg), 8 of them underperformed the TSP’s C-fund in 2022, losing more than the C-fund’s -14.8% loss. Second, like Chinese investments, ESG funds are available in the mutual fund window, so TSP participants who really want to invest in such companies via the TSP are able to do so – at least partially.
Instead of aiming for more partisan changes to the TSP, there is still room for improvement in the retirement plan that Congress could redirect their sights toward. Such items could include:
—-
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. **
Will there be an E-Fund? Read about the latest politicization of the Thrift Savings Plan (TSP) and other possible issues with the retirement plan for feds.
A lesson learned at one point, or another is that bigger isn’t always better, and the biggest certainly isn’t always the best. This goes for defined contribution plans as well, and the TSP is most definitely the world’s largest such plan, in terms of both money held (roughly $750 billion) and participants (a bit less than 7 million).
And there is a lot to like about the TSP. Its core funds track broad market indices and its relatively cheap when it comes to investment costs. But there are some areas for improvement that will probably not be addressed for a while, if at all, because the TSP just underwent a pretty serious renovation last year that brought a new recordkeeper, website, and investment options. Also, Congress, which has the legislative ability to make changes to the retirement savings plan, seems preoccupied with using the TSP for their political goals – on both the GOP and Democrats’ aisles.
Led mostly by Senator Rubio of Florida, the Republican side of the US Congress has been focused on removing Chinese investments from the TSP’s offerings. Even though a handful of Senators successfully blocked an index change to the I-fund in 2020, there are still some investment choices that include companies from China in the new mutual fund window, which the Florida Senator has been going after since last summer. His latest attempt was earlier this year when he reintroduced the TSP Fiduciary Act.
On the left side of the government’s legislative branch, the focus on the TSP pertains to climate change and social issues such as ensuring more female and minority fund managers are represented in the TSP’s investment choices. A recent rule from the Department of Labor (DOL) made it so plan managers are “allowed” to consider ESG factors when choosing investments, exercising shareholder rights, and proxy voting. Despite both chambers of Congress passing bills that would eliminate the rule, neither moved forward because the President stated he would veto any such law that made it to his desk.
Adam Schiff, a Democrat Representative from California, just reintroduced a bill of his own: the Federal Employees Sustainable Investment Act, which would add a sixth TSP fund to the existing five (G, C, S, I, and F). The new fund would be known as the “corporate responsibility” stock fund but since “C” is taken, would probably be called the “E” fund because it focuses on “ESG” stocks – which stands for Environmental Social Governance. Basically, for a company to be included in the fund, it would need to uphold minimum standards regarding corporate leadership, climate change impact, product safety, human rights, and community relations.
The act is not expected to even be voted on, but there are two important notes to consider. First, of the 10 largest ESG mutual funds (according to Bloomberg), 8 of them underperformed the TSP’s C-fund in 2022, losing more than the C-fund’s -14.8% loss. Second, like Chinese investments, ESG funds are available in the mutual fund window, so TSP participants who really want to invest in such companies via the TSP are able to do so – at least partially.
Instead of aiming for more partisan changes to the TSP, there is still room for improvement in the retirement plan that Congress could redirect their sights toward. Such items could include:
—-
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.
