It is no secret that the Thrift Savings Plan invests heavily into many fossil fuel companies. For any federal employees who take issue with this TSP investment, whether it is an ethical or environmental concern, new legislation has recently been introduced that would give federal employees the capability to shift their retirement savings from the fossil fuel industry.
This new bill was introduced by Congresswoman Rashida Tlaib (D-MI), in the Retirement Investments for a Sustainable Economy (RISE) Act of 2020 (H.R. 8806). If passed, it would offer a Climate Choice investment option for the TSP.
According to a press release on the legislation, The Climate Choice investment “is free from investment in fossil fuel companies, giving federal employees the flexibility and freedom to choose a more sustainable, socially responsible investment portfolio.”
“Federal employees who have honorably dedicated themselves to public service deserve to have the option of divesting from corporate polluters that put their profits ahead of our planet’s future and our public health, so that they can rest easier that their retirement investments are socially responsible,” Tlaib said in a statement.
Tlaib continues by saying that the bill will give federal employees the ability to “fight climate change” and “reduce the financial liability of fossil fuel asset losses.” In such a pivotal time for the planet and threats of environmental collapse due to global warming and pollution, this bill really allows federal employees the chance to make a difference with their TSP investments.
Currently, TSP does not offer its investors control over where their investments go. This is troublesome seeing that as of December 2018, it has approximately 5.5 million participants with about $580 billion in assets, making it the largest defined contribution plan in the world.
At the end of the day, federal employees will largely want to keep their retirement savings in the TSP as safe as possible while simultaneously have their investment grow over the course of their careers in order to help them have a secure retirement. Whether or not an environmentally conscious investment option would add value to the TSP is probably also one that will continue to be debated in Congress, and hopefully that choice will soon be offered to the federal employee in the near future.