Publisher's Perspective

“Whose Life Is It Anyway?” began as a play written for television some 50 years ago and since has been turned into a stage play, a movie and a novel. It’s a thought-provoking examination of quality of life issues arising when a sculptor is paralyzed.

“Whose Line Is It Anyway?” is an improv comedy television program that went through several iterations of its own over a number of years.


Recent developments with the Thrift Savings Plan, meanwhile, raise the question “Whose TSP Is It Anyway?” Those developments are thought-provoking but certainly not funny to the program’s six million account holders.

The latest is President Biden’s order telling the Labor Department to review how the TSP governing board “has taken environmental, social, and governance factors, including climate-related financial risk, into account” when deciding on its fund offerings. The that is to result in a report making recommendations late this year; it’s already widely expected to call for dropping companies in the fossil fuels fields from the TSP index funds.

While recommendations sometimes are carried out and sometimes not, the order is important if only because it seeks to use the TSP for a political purpose. Which is exactly what President Trump asserted around this time last year in what was at the time decried as an attempt to politicize the TSP.

The TSP is about as independent as an executive branch agency can get. It is self-funding, drawing no money from appropriations through the congressional budget process. It is run by a board of five members, three nominated by the President and two by congressional leaders, all of them subject to Senate confirmation but otherwise essentially operating like the board of directors of a corporation. The members do not report directly to anyone, not even to the President; they are bound by a fiduciary duty to act in what they see as the best interests of account holders, period.

For example, the board concluded that expanding the international stock I fund to reflect the stock markets of emerging market countries would be in their best interest because it would diversify that fund and yield a higher return. That was based on recommendations of outside studies the TSP commissioned.

The TSP was just about to make that change when President Trump last year noticed that one of countries to be added was China. He told the Labor Department—whose only previous role regarding the TSP was to conduct certain technical audits—to order the TSP to stop the change. The resulting letter, which asserted that the department had the right to issue such an order, raised concerns about political over-reach into the TSP’s decisions.

That question of the Labor Department’s authority was never resolved, though, because Trump meanwhile made nominations for the three board seats under a President’s control, to replace incumbents whose terms had expired and who were serving on automatic extensions. All of his nominees shared his view that having TSP money invested in China—even just the small fraction that it would have been—was, well, politically undesirable.


One of the board members then resigned, while the others suspended the proposed I fund expansion indefinitely. That suspension remains in place to this day—as do those four board members since the Trump nominees were not confirmed and President Biden has not made any nominations.

Meanwhile, bills have been introduced into Congress by people who share Trump’s general political views to essentially take the decision out of the TSP board’s hands by preventing inclusion of any countries that don’t meet certain accounting standards—which happen to include, of course, China.

How does Biden’s order compare? While it only orders a study, it actually goes farther in some ways. Where Trump merely told another department to get involved with the TSP’s business, Biden issued a direct executive order.

Bills to that end already had been introduced into Congress by people who share Biden’s general political views. One for example would require the TSP board to assess “whether implementing low-carbon investment strategies is profitable and consistent with its duties,” and directing it to create an index fund that “performs similarly to other plan index funds, but does not invest in fossil fuels.”

Those are the latest in years of proposals to require the TSP to create new funds for specific types of investments—real estate or precious metals, for example—or that pick and choose stocks according to certain standards—“socially responsible” investment funds, for example.

The TSP has always opposed them. It argues that the broad funds it offers offer better diversity, which protects investors against losses from downturns in a market segment or from a fund manager’s under-performance—in other words, that broad, passive index fund investing is in the best interest of investors.

That said, the TSP is partly to blame for this situation. It has authority to offer an investment “window” through which account holders could direct part of their money to outside investment funds offered by mutual fund companies. Those would include funds that track only certain market sectors as well as funds that exclude companies in certain industries.


However, the TSP’s approach to that authority has been the very definition of “slow walk.” That authority has existed for more than 10 years, and it’s been more than five years since the TSP formally committed to opening such a window. The window is finally expected to be open around mid-2022.

That will be the latest of many changes to the TSP since the program was created in the 1980s. But one thing that had been stable, at least until recently, was a firm commitment that the program be non-political.

The bipartisan members of Congress and others involved in writing the law at that time tried to assure protection out of two main concerns.

First, they wanted to stress that the money in the TSP belongs to the account holder, and the government should not be picking and choosing where they may invest it.

Second, they saw potential danger of the government creating winners and losers in the financial markets by manipulating what they expected—accurately, with more than $700 billion now on investment—to eventually become a huge amount of money.

If only we still had political leaders like them.

Review of TSP Investment Policies to Include “Climate-related financial risk”

Calculating Service Credit for Sick Leave At Retirement

What Adds Up to a High-3

What it Takes to Be an Average Retiree

What it Takes to Be a TSP Millionaire in Today’s Dollars

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

FERS Retirement Guide 2022