Sen. Rubio introduces bill on fiduciary duties of Federal Retirement Thrift Investment Board

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U.S. Sen. Marco Rubio (R-FL) introduced a bill that would update the fiduciary duty of the Federal Retirement Thrift Investment Board (FRTIB) to include national security considerations in managing the Thrift Savings Plan (TSP).

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The Thrift Savings Plan (TSP) is the $800 billion retirement savings of federal civil servants. Rubio’s bill, the TSP Fiduciary Security Act, would modify the FRTIB to include a duty not to harm national security. Rubio contends that investment of the TSP in Chinese military companies, as well as companies on the U.S. Department of Commerce Entity List, and proxy votes by the contractual managers of the TSP that would cause companies the TSP is invested in to harm national security assets. This would violate fiduciary duty if this bill is passed, according to a statement from Rubio’s office.

“It was incredibly shortsighted and dangerous for the Federal Retirement Thrift Investment Board to attempt to invest American civil servants’ retirement savings in companies that are tools of the Chinese Communist Party,” Rubio said. “But it was also revealing of a serious problem: the Board and their friends on Wall Street will get away with using American servicemembers’ own savings to fund threats to U.S. national security if the fiduciary duties binding these money managers only focus on short-term financial value. My legislation would update the Board’s fiduciary duty to more accurately reflect the interests of the TSP’s beneficiaries rather than the financial interests of Wall Street.

Specifically, the TSP Fiduciary Security Act would prevent the use of the FRTIB’s fiduciary duty to justify investments that harm national security by incorporating a duty not to harm U.S. national security. Breaches of national security would be defined as:

• Investments in Chinese military companies;
• Investments in companies on the entity list;
• Proxy votes in favor of transactions that would breach contracts with the federal government, reduce capital expenditures in critical technologies, or outsource critical technologies to China or other countries of national security concerns; and
• Proxy votes in favor of nominees to the board of directors employed by any entity to which investment in would be a breach of fiduciary duty.

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