A new bill soon to be hitting the Congressional floor is looking to stop the Thrift Savings Plan’s I Fund from investing in Chinese and Russian owned interests.
Jim Banks, a Republican Congressperson out of Indiana is the one who introduced the measure, citing, as he put it, a malicious pattern of behavior from those two countries, directed at the United States of America.
Congressman Banks suggests that if we are to confront growing threats from these hostile countries, it is not wise to be supporting their economies financially. It is his position that these countries, in particular, are attempting to undermine the stability of the United States, and it would be a significant error to be giving money their way. He hopes that this legislation will be seen as “common sense” when put before the rest of Congress.
In November of 2017, the I Fund had been altered so that it was an MSCI ACWI index, meaning that investments in companies with Chinese and Russian interests are currently permissible. Should Banks’s bill pass, it would not be enforced until 2020, but it would make it so that investing within those countries would no longer be an option.
In regards to returns on investments or any additional incurred fees, Banks claims that his bill would have no impact on the Thrift Savings Plan, although such a statement may be dubious, as he has offered no clear response yet as to what sort of changes getting rid of those investments might cause.
There have been other people in Congress who have proposed things similarly before, and other changes to the TSP as well. For instance, Oregon’s Democratic Senator Jeff Merkley is trying to alter the TSP to stop investing in companies that deal in fossil fuels, hopefully addressing concerns about climate change. Both these Senator’s bills have yet to pass.