Sens. Marco Rubio, R-Fla., and Jeanne Shaheen, D-N.H., have asked a Senate committee to take up their bill that would prevent the Federal Retirement Thrift Investment Board, Washington, from directing billions of dollars in retirement assets to an index fund that includes Chinese companies.
In a letter sent Wednesday to the leaders of the Senate Homeland Security and Governmental Affairs Committee, the senators requested that their bill — the Taxpayers and Savers Protection Act — be "expediently" considered.
The bill, which was introduced Nov. 6, would conditionally ban the investment of Thrift Savings Plan funds in securities listed on mainland Chinese exchanges. In particular, it would prohibit investment in issuers listed on foreign securities exchanges for which the U.S. Public Company Accounting and Oversight Board has not issued an audit inspection and for which the PCAOB is prevented from conducting such inspections.
After mounting calls from Capitol Hill — led by Mr. Rubio and Ms. Shaheen — to reverse its course, the board, which administers the $599.5 billion Thrift Savings Plan — the retirement plan for 5.6 million federal employees and members of the uniformed services — decided at its Nov. 13 meeting to uphold its 2017 decision to shift TSP's I Fund benchmark to the MSCI ACWI ex-U.S. Investable Market index from the MSCI EAFE index.
The new index is made up of about 8% Chinese companies, as of Sept. 30, according to an Aon Hewitt Investment Consulting study presented to the board last month. Aon recommended the board switch to the MSCI ACWI ex-U.S. IMI index in 2017 and reiterated that recommendation last month.
The change in investment strategy is set for implementation next year. As of Dec. 31, TSP's I Fund had $40.7 billion in assets.
"While the FRTIB may not see itself as a policy making institution, Congress certainly is," the senators wrote. "Taking up the TSP Act will allow lawmakers to protect federal employees from investing their hard-earned retirement savings in AVIC's AviChina Industry & Technology, Hikvision, ZTE and other Chinese companies that are engaged in activities counter to American interests."
