Recently introduced legislation would prohibit the I Fund within the Thrift Savings Plan from investing in Chinese and Russian companies.
The bill (H.R. 2903) was introduced by Congressman Jim Banks (R-IN). He said it is necessary given the history of malice towards the United States from both countries.
“The governments of Russia and China have a long history of malicious activity against the United States,” said Banks. “If we are to confront the growing threats from these hostile countries, we should not be supporting their economies financially. This common-sense legislation would prevent federal money from entering countries that are actively attempting to undermine our global leadership.”
According to a press release from Banks, the Federal Retirement Thrift Investment Board changed the I-Fund index to the MSCI ACWI Index in November 2017 which allows the possibility of investments in companies in China and Russia. The change would go into effect in 2020, but his bill would of course preempt a portion of the change by blocking investments in China and Russian companies.
Banks also said that the bill would have no financial impact on the TSP with respect to impacting its fees or investment returns. How exactly he can know with certainty what impact eliminating these investments would have on fees and future investment returns is not clear from his press release.
Banks is not the first lawmaker to propose altering investments in the TSP for political reasons. Senator Jeff Merkley (D-OR) has twice proposed using it as a vehicle for combatting climate change by avoiding investments in fossil fuel companies.
“The bill (H.R. 2903) was introduced by Congressman Jim Banks (R-IN). He said it is necessary given the history of malice towards the United States from both countries.” Federal retirement money should not be going to those actively attempting to undermine our global leadership. https://t.co/AyPQt2ExB2
— Jim Banks (@RepJimBanks) May 30, 2019
