Congress again has its eyes on the Thrift Savings Plan.
Sen. Marco Rubio (R-Fla.) introduced a new bill last month that would add new fiduciary responsibilities to the board that manages the TSP.
The Federal Retirement Thrift Investment Board (FRTIB), by law, is required to act only in the fiduciary interests of its participants. This legislation, known as the TSP Fiduciary Security Act, would effectively compel the TSP to consider potential national security implications when making decisions about its funds and options for participants.
The board itself has some concerns with the bill.
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“It undermines the current duty to act solely in the interests of the TSP participants and alters the fundamental concept of a fiduciary duty,” Kim Weaver, FRTIB’s executive director of external affairs, said last week at the TSP’s monthly board meeting. “I would note that it does not change the otherwise identical fiduciary duty applicable to any other 401(k) that millions of Americans use to save for their retirement.”
In other words, the bill doesn’t compel any other 401(k) plan to make changes to the way they manage their holdings.
Under Rubio’s legislation, investments in Chinese companies or any others on the Commerce Department’s Entity List are considered “breaches of fiduciary duty.” The attorney general, as well as the Defense, Homeland Security, Labor and Treasury secretaries, would write new regulations explaining how the TSP should comply with the new national security considerations.
Rubio is one of a few senators who has expressed deep concerns with the TSP and plans it made last year to move the international fund to a new, China-inclusive benchmark. The move would have given TSP participants access to large, mid and small-cap stocks from more than 6,000 companies in 22 developed and 26 emerging markets. An independent consultant said it would have improved the anticipated returns for TSP participants.
He has introduced several bills designed to block the TSP from moving to a China-inclusive index.
Beyond the TSP legislation, here are three other bills worth watching in the next few months.
House Democrats are trying a second time to shed more light on the political appointees filling prominent roles in the executive branch.
The House Oversight and Reform Committee advanced the Periodically Listing Updates to Management (PLUM) Act last week. The legislation folds together two bills, one from panel chairman Carolyn Maloney (D-N.Y.), and another from Rep. Alexandria Ocasio-Cortez (D-N.Y.).
Together, the bill would require the Office of Personnel Management to publish and maintain an active roster of political appointees online.
It would also require OPM to work with the White House Office of Presidential Personnel to make a summary of demographic data available for those appointees.
“To meet the needs of the American people, our political appointees need to reflect America,” Ocasio-Cortez said in a statement. “The Political Appointments Inclusion and Diversity Act would shine a light on who is at the table in our government and who is not. By publicly reporting on the demographics of appointees we will see where efforts need to be improved to ensure that our policymakers are not only talented, but diverse and representative of everyone in our country.”
Currently, OPM works with the House and Senate oversight committees to publish a list of political appointees, known as the “Plum Book,” once every four years. The information is only up to date at the time OPM and the committees compile and publish the list; it isn’t a real-time account detailing when appointees come and go or move into new positions.
Maloney, along with Reps. Gerry Connolly (D-Va.) and John Sarbanes (D-Md.), first introduced the PLUM Act last year. Sen. Tom Carper (D-Del.) also introduced companion legislation in the 116th Congress, and the bill cleared the oversight committees in both chambers last year.
Former temporary and seasonal employees may get another shot at making retirement “catch-up” contributions under a bill from Reps. Derek Kilmer (D-Wash.) and Tom Cole (R-Okla.), which they reintroduced last week.
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Currently, seasonal and temporary federal employees don’t have the opportunity to make retirement contributions, even though many temporary workers eventually transition to permanent employment.
If they do become permanent employees, they can’t currently make “catch-up” contributions that might allow them to retire after at least 30 years of service, and their time as a temporary employee doesn’t count toward their federal annuities.
As a result, Kilmer and Cole said they’ve noticed former seasonal and temporary employees are working longer than their peers for the same retirement benefits. Their legislation, the Federal Retirement Fairness Act, would allow former seasonal and temporary employees to make contributions for their service time toward their annuities, with interest.
Kilmer and Cole first introduced this legislation back in 2019.
The bill has a long list of supporters, including the National Active and Retired Federal Employees (NARFE) Association, Federal Managers Association and others.
“Seasonal and temporary federal employees who answer the call of duty deserve the same level of deference as the permanent employees they work with,” said Randy Erwin, national president of the National Federation of Federal Employees, which represents some seasonal park rangers and U.S. Forest Service employees. “It is unconscionable to ignore temporary or seasonal labor upon becoming permanent employees, given many of these employees risk their lives and health for these jobs, as thousands of wildland firefighters do each year. To deny counting that time on the job is akin to creating a second-class of employee. If they put the time in, they deserve to have it counted toward retirement.”
Democrats on the House Homeland Security Committee have combined a long list of priorities for the Department of Homeland Security into one bill.
The DHS Reform Act, which committee Chairman Bennie Thompson (D-Miss.) formally reintroduced last week, is 263 pages long and addresses a wide array of challenges that the department has faced in recent years. It would:
The bill would also authorize the DHS undersecretary for management as the department’s chief acquisition officer. The legislation does not, as Thompson has advocated in recent years, consolidate congressional jurisdiction over DHS.
The department currently must report to more than 90 committees and subcommittees in Congress, which stretches the DHS thin and creates frustration for lawmakers who want to reauthorize the agency.