The Federal Thrift Investment Board said it opposes the option for a new Thrift Savings Plan fund that one congressman is calling a “socially responsible” investment.

The Federal Employees Responsible Investment Act, introduced last week by Rep. Jim Langevin (D-RI), would offer a new fund to TSP investors that is based on a “Corporate Responsibility Index.”

Companies on the index would have to meet strict financial criteria, among other requirements such as environmental sustainability, community involvement, safe products and “respect for human rights around the world,” according to a release from Langevin’s office.

“Making an investment in companies that are committed to corporate responsibility will have a positive impact on our financial system, while empowering federal employees to reward companies that share their values,” Langevin said in the release.

Tom Trabucco, director of external affairs at the FTIB, said the option would inject politics into TSP account investments.

“Congress wanted us to offer broad-based indexes only for the employees — not interest groups having their battles on various issues,” Trabucco said on the DorobekINSIDER.

Trabucco said Langevin’s proposal creates “winners and losers.”

FTIB’s concern is the fund would screen legal businesses, such as those that deal in alcohol, gambling or firearms.

“You end up getting in this situation where the government’s plan is discouraging people from investing in businesses that are perfectly legal,” Trabucco said.

In many ways, the proposal is not new from previous efforts to “meddle” with TSP funds, FedSmith.com reports.

One possible compromise is to use a “mutual fund window,” allowing individuals a certain amount of time to invest in one or many mutual funds. The individual would pay for the cost of the mutual fund themselves.

The option, part of the TSP Enhancement Act of 2009, still requires more analysis, Trabucco said.

But, he added, “We think, over time, that would be the way to try to put something like this in place, if indeed there is a sufficient demand to even put this in place.”

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