Attempts by Republicans on Capitol Hill to prevent millions of federal workers from using their retirement savings — and subsequent taxpayer-dollar matches — to invest in funds that make decisions based on environmental, social or governance (ESG) criteria were unsuccessful.
The Thrift Savings Plan (TSP), the largest defined-contribution retirement plan in the world worth more than $820 million at the end of 2021, is the equivalent of a 401(k) for those employed by the federal government, including members of Congress.
As of June 1, TSP participants are now able to invest their retirement money in 5,000 mutual funds that incorporate ESG when determining which companies to invest in by taking into consideration non-financial factors, such as the impacts of climate change or social issues.
At issue for Republicans was that those with a TSP have their contributions matched by the federal government rather than a private employer, as with a 401(k). That means any investments that evaluate ESG factors of companies — which some Republicans vehemently oppose because they say it politicizes and restricts a free market — are being done so with taxpayer money.
A group of eight House Republicans, led by Rep. Chip Roy of Texas, introduced a bill last week that would prevent the “woke scam” of allowing TSP to invest in ESG funds.
“It restricts the free flow of capital, undermines U.S. energy freedom to the benefit of our enemies and advances woke racial and gender ideologies intent on dividing the republic,” Mr. Roy said in a statement at the time. “The federal government shouldn’t have any part in this radical nonsense, and especially shouldn’t be using your money to do it.”
A half-dozen GOP senators sent a letter to the Federal Retirement Thrift Investment Board last week asking that, as the agency overseeing TSPs, it cancel or delay implementation over national-security concerns that “dangerous, noncompliant or opaque Chinese securities” could be included in the 5,000-some ESG mutual funds.