Federal Employees News Digest
TSP to offer sustainable funds
- By FEND Staff
- Jul 19, 2021
The Thrift Savings Plan (TSP) federal employee retirement funds total well over $700 billion. For years, a sizable slice of the civil service community—whose hopes for the future are tied up in these very large financial stakes—has argued there should be more fund choices, more types of funds, and greater control over the work their retirement capital investments do out in the real world.
The most talked-about and desired new angle? Funds that employ responsible Environmental, Social and Governance (ESG) principles. ESG is the term of art for such funds.
Coming soon—as detailed reports in Roll Call, Barron’s, and other publications explain—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. So relays the 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.”
News reports say the new TSP ESG window should be available by an as-yet unannounced date, next year. Controversy, strong opinion and political battles have accompanied all aspects of the move toward TSP ESG funds.