Federal employees’ retirement funds will not be invested in Chinese stocks
Washington. The Coalition for a Prosperous America (CPA) today applauded the Federal Retirement Thrift Investment Board for its decision not to invest government employees’ retirement money in companies based in China. CPA had actively urged the Trump administration to stop the Board’s plan to shift billions of dollars in U.S. retirement assets to an index fund that includes sanctioned Chinese companies. The Board has now voted to pause the planned implementation.
“This is good news for the American people,” said CPA Chair Dan DiMicco. “It would be unconscionable for the retirement savings of America’s military personnel to be invested in the very Chinese military contracting companies that threaten the safety of America’s armed forces. Some of these Chinese companies are already sanctioned by the U.S. government for enabling human rights violations or providing weapons to rogue regimes. It would make absolutely no sense to fund them with federal employee pensions.”
The Thrift Savings Plan’s I Fund, which is the 401(k) equivalent for federal retirees, holds assets worth $54.3 billion. Bipartisan legislation to stop the move was introduced by Sens. Marco Rubio (R-FL) and Jeanne Shaheen (D-NH) and by former Rep. Mark Meadows (R-NC). However, the legislation was never scheduled for a vote. CPA has consistently opposed the move and continues to urge the reshoring of critical national industries back to the United States.
In November 2017, the Federal Retirement Thrift Investment Board had originally announced a plan to move roughly $50 billion of its overall pension program to the MSCI All-Country World Index by June 2020. The index includes a number of companies controlled by the Chinese Communist Party (CCP).
This week, White House National Security Adviser Robert O’Brien, and National Economic Council Chair Larry Kudlow wrote to Labor Secretary Eugene Scalia stating that the White House wanted the move halted. Scalia then wrote a letter to Michael Kennedy, Chairman of the Federal Retirement Thrift Investment Board, directing the Board to immediately halt all steps associated with the investment plan. The Board then voted unanimously to halt the shift in pension funds.
“We believe this ‘pause’ of investment plans means it will never happen,” said Michael Stumo, CEO of the CPA. “The American people would never support the funding of bad actor companies in China. It is ridiculous that Chinese company stocks are listed in the US but we are not allowed to review their financial audits. Too often, Wall Street and globalists ignore national security concerns when pursuing short-term profit. This can’t continue. We’re pleased with the Board’s decision and hope it leads state and private pension plans to also divest from funds that send money to companies influenced by hostile governments.”