Fedweek

The TSP has issued a statement opposing bills (HR-1618 and S-606) that would require it to create a “Climate Choice” stock index fund excluding investments in any company involved with fossil fuels, and which would require the TSP to set up an internal panel to advise it on investment strategies related to countering climate change.

The proposal would run counter to the TSP’s design of offering broad-based funds that are passive reflections of overall stock and bond markets and would instead require the TSP to pick winners and losers, the statement said.

ADVERTISEMENT

It also projected that such a change would reduce returns to investors, which would run counter to the TSP’s mission to act in their best interests; stressed that the money in the TSP belongs to individuals, not the government; and said that making the change would open the door to further limits on the investment funds.

The bills are the latest in a long series of proposals in Congress to either exclude companies in certain lines of business from the TSP stock funds or to create additional funds for specific sectors, such as real estate or precious metals. The TSP expressed opposition to each on generally the same grounds it now is citing.

While the makeup of TSP funds typically draws little attention, a major issue did arise last year over a long-standing plan to expand the international stock I fund to include emerging market countries, resulting in the plan being put on indefinite hold.

The TSP has had authority for years to allow account holders to invest some of their money in outside mutual funds through a so-called investment “window.” That would allow investors to choose funds targeted toward specific types of investments and could effectively make a moot point out of the issue of targeted funds within the TSP. However, that option is not expected to be available until sometime next year.

Q1 Adds 10K New TSP Millionaires; Mixed Returns for March

Bill to Soften ‘Windfall’ Reduction Reintroduced

TSP Delays I Fund Change Amid Pressure from White House (May 2020)

What it Takes to Be a TSP Millionaire in Today’s Dollars
With a long enough timeline, involving consistent large contributions and decent long-term stock returns during the period, it’s possible to become a millionaire from compounding a middle-class or upper middle-class income, including most jobs in federal service.

TSP Investors Handbook, New 7th Edition