A key member of Congress on federal employee issues, Rep. Gerald Connolly, D-Va., has challenged administration’s pressuring of the TSP governing board over a potential change in the international stock I fund to include emerging market countries including China.
Connolly, who heads the House subcommittee on the federal workforce, asked the Labor Department to explain its decision to write to the board telling it to stop implementation of the change, which had been set to occur in the upcoming months. The TSP board is the “only independent entity that has legal authority to administer and manage the TSP,” he wrote.
The Labor Department letter led to questions regarding whether the department actually has direct authority over the TSP as it asserted, an issue that has not been resolved. In delaying the change—which it twice had approved on grounds that a broader index would be in the best interests of investors—the TSP instead pointed out that nominations had been made just a week earlier to replace three of the five members (all five are serving on extensions, their regular terms having expired).
The presumption is that—assuming they are confirmed—those three would vote to keep the I fund index as it is. However, other options also are available, including investing in an index that is broader but excludes China.
In his letter, Connolly said that the administration “has overstepped its authority and politicized a well-established, independent board whose sole mission is to help public servants maximize their retirement savings.”