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Attempts by Republicans on Capitol Hill to prevent millions of federal workers from investing in their retirement savings and subsequent taxpayer-dollar matching—funds that make decisions based on environmental, social, or governance (ESG) criteria—have failed.
The World’s largest defined contribution retirement plan (TSP), valued at more than $820 million at the end of 2021, is the equivalent of 401(k) for those employed by the federal government, including members of Congress. .
From 1 June, TSP participants will be able to invest their pension funds in 5,000 mutual funds that include the ESG when determining which companies to invest in, taking into account non-financial factors such as the effects of climate change or social issues.
The problem for Republicans was that TSP holders’ contributions were covered by the federal government rather than a private employer, as with a 401(k). This means that any investment that assesses the ESG factors of companies, which some Republicans vehemently oppose because they say it politicizes and restricts the free market, is made with taxpayer money.
A group of eight House Republicans, led by Texas Representative Chip Roy, introduced a bill last week that would prevent “evoked fraud” that would allow the TSP to invest in ESG funds.
“It restricts the free flow of capital, undermines US energy freedom for the benefit of our enemies, and advances have awakened ideologies of race and gender intent on dividing the republic,” Mr. Roy said at the time. “The federal government should not have any role in this radical bullshit, and especially not use your money to do it.”
Half a dozen GOP senators sent a letter to the Federal Pension Thrift Investment Board last week asking the agency that oversees TSPs to revoke or delay implementation due to national security concerns that “dangerous, incompatible or opaque Chinese securities” could be included. 5,000-in some ESG mutual funds.
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