A bipartisan bill to prevent the Federal Retirement Thrift Investment Board, Washington, from directing retirement savings to Chinese stocks has been reintroduced in the Senate and House.
Rep. Mike Waltz, R. Fla., introduced the Taxpayers and Savers Protection Act on Tuesday, a move preceded by Sens. Marco Rubio, R-Fla., Jeanne Shaheen, D-N.H., Todd Young, R-Ind., Rick Scott, R-Fla., and Joni Ernst, R-Iowa, who did the same on May 20.
The Taxpayers and Savers Protection Act would conditionally ban the investment of Thrift Savings Plan funds in securities listed on Chinese exchanges, according to a news release. Moreover, it would prohibit investment in issuers listed on foreign securities exchanges where the U.S. Public Company Accounting and Oversight Board has not issued an audit inspection and where the PCAOB is prevented from conducting such inspections.
"It is absolutely unacceptable that the Chinese Communist Party and government continues to profit from the retirement accounts of U.S. government employees and members of the military," Mr. Rubio said in a news release. "Congress can't 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."
The bill was first introduced in November, during the previous congressional session. It is similar in scope to a bill introduced May 18 by Sen. Tommy Tuberville, R-Ala., which would prohibit the Thrift board from investing TSP assets in Chinese companies.
The Thrift board administers the $757.8 billion TSP, the retirement system for 6.3 million federal employees and members of the uniformed services.
In November 2019, the board reaffirmed a 2017 decision to shift the TSP's I Fund benchmark to the MSCI ACWI ex-U.S. Investible Market index from the MSCI EAFE index. The new index was made up of about 8% Chinese companies, according to an Aon Hewitt Investment Consulting study presented to the board in October 2019.
But in May 2020, Trump administration officials sent a letter to then-FRTIB Chairman Michael D. Kennedy urging the board to stop the I Fund index shift. The same week, President Donald Trump nominated three people to the five-member board that, upon Senate confirmation, could have led to a new majority. At a subsequent meeting in May 2020, the board decided to pause the implementation and let the new board members make the final decision.
However, those Trump nominees were never confirmed by the Senate, and President Joe Biden pulled their nominations in February. Mr. Biden has yet to put forth his own nominees.
The Senate is currently considering a bill — the Endless Frontier Act — aimed at boosting American competitiveness with China with investments in research and manufacturing. More than 500 amendments have been offered on the bill, including attempts from Sens. Rubio and Tuberville to attach their TSP-China legislation, respectively. To date, their amendments have not been considered.
The Thrift board opposes both amendments, said Kim Weaver, the board's director of external affairs, at a board meeting Wednesday. "We have communicated our position that both amendments discriminate against our participants in that neither prohibition would apply to any other 401(k) or IRA," she said.
