Finally, feds could put ESG in their TSP

The Thrift Savings Plan (TSP) federal employee retirement funds total well over $700 billion. And for some time now, a sizable slice of the civil service community has voiced a desire to see more funds, more types of funds—and greater control over what their retirement capital investments do out there in the real world. 

The most talked-about angle? Funds that employ responsible Environmental, Social and Governance (ESG) principles. 

Coming soon—as a detailed report in Roll Call explains—a new TSP “window” that will permit feds to choose to move some of their TSP savings among 5,000 mutual funds, including those that insist on ESG principles. The piece sourced its information the TSP’s governing body, the Federal Retirement Thrift Investment Board. 

Feds invested in TSP will not have to change any of their fund choices—and the five core funds will remain in place. The upcoming change simply will allow those feds who are interested in doing so to move some of their nest egg into “sustainable” investments. 

Expert analysis in the piece notes that, in a business world addressing climate change and other environmental threats, certain ESG investments and funds are outperforming the broader market. 

“ESG investing has grown in popularity in recent years, and may be referred to in many different ways, such as sustainable investing, socially responsible investing, and impact investing,” a current Securities and Exchange Commission bulletin says of the trend. “ESG practices can include, but are not limited to, strategies that select companies based on their stated commitment to one or more ESG factors—for example, companies with policies aimed at minimizing their negative impact on the environment or companies that focus on governance principles and transparency.”

The Roll Call report says the new TSP ESG window should be available by sometime next summer. 

2021 Digital Almanac

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