The $706.9 billion Thrift Savings Plan, the retirement plan for 6.6 million federal employees and uniformed service members, opened a mutual fund window on June 1, which gives participants TSPs qualify for access to more than 5,000 mutual funds, including some with exposure to Chinese companies, Rubio said.
For participants who choose to invest through the mutual fund window, the initial investment must be at least $10,000 and participants cannot invest more than 25% of their total account in the fund window mutual funds, according to information on the TSP website. Fees associated with the mutual fund window include an annual fee of $55 to cover administrative costs, an annual maintenance fee of $95, and a fee of $28.75 per transaction.
Mr. Rubio in his letter asked Mr. Gerber four questions:
- What steps is the FRTIB taking to remove funds that include Chinese companies that are blacklisted by the federal government or suspected of engaging in Uyghur forced labor?
- Given the confirmation of the inclusion of these companies, what actions is the FRTIB taking to seek out the blacklisted companies among other funds and remove them quickly?
- Will the FRTIB commit to creating more options for TSP account holders wishing to invest in emerging markets funds that exclude companies based in China and Hong Kong?
- Will the FRTIB reconsider, reverse or modify its mutual fund window initiative in response to the obvious risks associated with it?
“Beyond blacklisted entities, companies based in China or Hong Kong do not allow US securities regulators access to independent audits,” Rubio said. “The lack of transparency and compliance with U.S. law significantly increases the risks for U.S. investors. It is no exaggeration to say that the FRTIB appears to be failing in its fiduciary duty to our military and federal employees.”
Kim Weaver, director of external affairs for the Thrift council, said in an email that the council had received Rubio’s letter and would respond to it.
Mr. Rubio has long focused on TSP and China. Earlier this year it delayed the appointments of four current board members, including Mr Gerber, until they said they had no intention of investing the assets of TSP in Chinese companies.