WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded the reintroduction of the Taxpayers and Savers Protection (TSP) Act, bipartisan, bicameral legislation that would ban the Federal Retirement Thrift Investment Board (FRTIB) from steering federal employee retirement funds in the Thrift Savings Plan (TSP) — the largest retirement fund in the world with $720 billion in assets — to China.
Last August, CPA released exclusive data that found the TSP’s new Mutual Fund Window has serious exposure to companies owned or controlled by the Chinese Communist Party (CCP). Shockingly, the FRTIB admitted publicly that it has not conducted any due diligence to evaluate whether these mutual funds include Chinese-owned entities that pose national security risks or fund Chinese companies engaged in human rights violations. Earlier this month, Newsweek published an investigation that found that, “[m]illions of federal employees can invest in Chinese companies sanctioned by the U.S. government via its flagship retirement plan, even though these companies have been branded a danger to national security or are accused of profiting from forced labor or other human rights abuses.”
U.S. Senators Marco Rubio (R-FL), Rick Scott (R-FL), Joni Ernst (R-IA), Josh Hawley (R-MO) and Jeanne Shaheen (D-NH) reintroduced the TSP Act in the Senate. U.S. Representatives Michael Waltz (R-FL), Chrissy Houlahan (D-PA), John Rutherford (R-FL), Elise Stefanik (R-NY), Mike Gallagher (R-WI), and August Pfluger (R-TX) introduced the bill in the House.
“We applaud the reintroduction of bipartisan, bicameral legislation to ban federal retirement savings from flowing to CCP companies that are directly aiding and abetting Beijing’s military modernization, surveillance state, and other malign activities,” said Zach Mottl, Chairman of CPA. “CPA’s research raises serious red flags about the TSP’s exposure to mutual funds that are heavily weighted towards Chinese companies — 22 percent on average — including those building aircraft carriers, using forced labor, and perfecting the CCP’s Orwellian surveillance state. It is unconscionable that, despite the U.S. government either sanctioning or listing these Chinese companies as national security risks, the TSP board is marketing these funds as a safe investment to federal government employees, including active members of our military and our nation’s veterans.”
Alongside the #NoTSP4CCP Coalition, CPA commissioned a deep-dive into the Mutual Fund Window’s offerings to determine the extent of which bad-actor Chinese companies were receiving capital from the TSP, the federal government’s 401K plan and the largest defined contribution plan in the world.
CPA found that within the mix of the 5,000 different funds offered, at least 22 are China-only funds. The Federal Retirement Thrift Investment Board (FRTIB) has publicly admitted that it does not “evaluate or monitor any of the mutual funds to ensure that they are prudent investments” on behalf of TSP participants. These 22 funds do not carry any specific warnings for potential TSP investors.
CPA’s research also found that five of the largest international funds in the Window had an average weight of 22 percent toward Chinese companies, and all five funds held companies listed on the U.S. Department of Treasury’s list of Chinese Military-Industrial Companies, the Department of Commerce Entity List, the Commerce Department’s Unverified list, or the Department of Defense Chinese Military Companies list. Companies are placed on these lists because they threaten U.S. national interests, have been involved in serious technology theft, and/or are implicated in the genocide of the Uyghur people.
Last November, Robby Stephany Saunders, CPA’s Vice President of National Security, authored an op-ed in The Washington Times that called for Congress to pass legislation to ban the FRTIB from investing federal retirement savings in the TSP in Chinese companies.
“Congress must tackle Beijing’s access to U.S. financial markets, including passive investment products such as exchange-traded funds (ETFs) and mutual funds. This is a key means by which Beijing continually funnels billions of American investment dollars to Chinese companies.
“It’s now a national security issue — that Wall Street continues to trade funds that have significant exposure to companies owned or controlled by the Chinese Communist Party (CCP). Particularly concerning is the federal employee Thrift Savings Plan (TSP), which contains at least 22 China-only funds. To counter this, Congress must pass legislation that will instruct the Federal Retirement Thrift Investment Board (FRTIB) to remove adversarial Chinese firms from the investments of federal workers, military families, veterans and even members of Congress.”