The Senate Homeland Security and Governmental Affairs Committee approved Wednesday the nominations of three people seeking to join Federal Retirement Thrift Investment Board, Washington.
Christopher Bancroft Burnham and Frank Dunlevy, the latter of whom would, if confirmed, become the board's chairman, were each approved by voice vote. John M. Barger's nomination was approved 8-3. During a Sept. 9 committee hearing, senators paid Mr. Barger extra attention because of his current position on the U.S. Postal Service Board of Governors.
President Donald Trump in May nominated each of them to the five-member board, which administers the $663.3 billion Thrift Savings Plan, the retirement system for 5.9 million federal employees and members of the uniformed services.
The nominations came amid a point of controversy for the board as lawmakers on Capitol Hill and administration officials pressed the board to reverse 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, as of Sept. 30, 2019, according to an Aon Hewitt Investment Consulting study presented to the board in October. Aon recommended the board switch to the MSCI ACWI ex-U.S. IMI index in 2017 and reiterated that recommendation last fall.
In November, the board reaffirmed its decision to move forward with the shift, which was slated to start in the second half of 2020, but the week after Mr. Trump nominated the new board members in May, his administration urged the board to halt the shift. The following day, the board elected to press pause and let the potential new members make the final call.
Mr. Barger, Mr. Burnham and Mr. Dunlevy were each nominated to fill seats held by board members whose terms have expired. The board currently has four members, as former Chairman Michael D. Kennedy stepped down in June following his potential replacement's nomination.
At the Sept. 9 hearing, Sen. James Lankford, R-Okla., asked the nominees for their views on investing in Chinese companies and each expressed skepticism.
Mr. Barger said he has "great concerns about investing in China" because of the low reporting standards to which Chinese companies are held.
Added Mr. Dunlevy: "All Chinese companies are basically state-owned enterprises and function at the behest of the party. At any point in time, the (Chinese Communist) Party could decide that, 'We don't want that company to make a profit, we want that company to go for market share or something else,' without regard for the stockholders."
Mr. Burnham referenced his experience as Connecticut treasurer where he was the sole trustee of the Connecticut Retirement Plans & Trust Funds, Hartford, with assets that now total $37 billion, for how he would approach the stewardship of the Thrift Savings Plan.
"When I was state treasurer of Connecticut, I had a strict fiduciary duty to the men and women of Connecticut, to the teachers in Connecticut, to give them the highest return at a reasonable risk; not to play politics with their pension fund, but to help guide it," he said, adding that it was his job "to invest that money prudently and wisely and without politics."
In his opening statement on Sept. 9, Sen. Gary Peters, D-Mich., the committee's ranking member, said, "We cannot allow the retirement savings of our nation's public servants to be subject to undue influence from the administration or special interest groups."
