S.1368 - TSP Fiduciary Security Act of 2025 (119th Congress)
Summary
S.1368, the TSP Fiduciary Security Act of 2025, aims to amend Title 5 of the United States Code to address the fiduciary responsibilities related to the Thrift Savings Fund (TSP). The bill emphasizes preventing TSP investments from harming U.S. national security. It mandates reviews and regulations to ensure compliance, particularly concerning investments in entities linked to countries like the People's Republic of China.
Expected Effects
The bill will likely lead to changes in how the TSP is managed, with a greater focus on national security considerations. This could result in the divestment from certain international investments, especially those in Chinese entities. The Secretary of Labor, in consultation with other secretaries, will play a key role in establishing and enforcing these new regulations.
Potential Benefits
- Enhanced National Security: Aims to prevent TSP investments from inadvertently supporting entities that could pose a threat to U.S. national security.
- Protection of Beneficiaries' Interests: Reinforces the fiduciary duty to act in the best interests of TSP beneficiaries, including safeguarding their financial security against national security risks.
- Increased Oversight and Accountability: Mandates reviews and reports to Congress, increasing transparency and accountability in TSP investment decisions.
- Clarified Fiduciary Responsibilities: Provides clearer guidelines for fiduciaries regarding national security considerations in investment decisions.
Most Benefited Areas:
Potential Disadvantages
- Potential for Reduced Investment Returns: Restricting investment options based on national security concerns could limit diversification and potentially reduce returns for TSP participants.
- Increased Compliance Costs: The new regulations and review processes could increase administrative and compliance costs for the TSP.
- Risk of Overly Broad Restrictions: The definitions of entities posing a national security risk could be overly broad, leading to unnecessary restrictions on investments.
- Potential for Political Influence: The involvement of multiple secretaries in the review process could introduce political considerations into investment decisions.
Constitutional Alignment
The bill's alignment with the Constitution is primarily related to Congress's power to regulate federal employee benefits and national security. Article I, Section 8 grants Congress the power to provide for the common defense. The bill does not appear to infringe on individual rights or freedoms protected by the Bill of Rights. However, the delegation of regulatory authority to the executive branch must be balanced to avoid violating the separation of powers principle.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).