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TSP Signals It Will Offer Climate Friendly Options, and More
A weekly roundup of pay and benefits news.
Officials at the federal government’s 401(k)-style retirement savings program confirmed last week that an initiative to allow Thrift Savings Plan participants access to mutual funds will include environmentally sustainable options.
The Federal Retirement Thrift Investment Board has been under increasing scrutiny over how it accounts for financial risks associated with climate change as it carries out its fiduciary duty to participants. Last month, the Government Accountability Office suggested that the financial markets may not adequately have climate change risks incorporated into companies’ stock prices, and urged the agency responsible for administering the TSP to review how it judges climate risks as part of its next assessment of plan offerings next year.
A recent executive order from President Biden instructs the secretary of Labor to conduct an assessment of how the TSP takes “climate-related financial risk” into account as part of its fiduciary duties. And legislation pending in Congress would create an advisory panel on climate change at the agency, require a study on climate change risk, and could force the creation of an optional plan for those who don’t want to invest in fossil fuels.
In response to the GAO report, TSP Executive Director Ravindra Deo noted that the agency would implement its mutual fund window program in summer 2022. And last week, officials confirmed to Roll Call that some of the more than 5,000 mutual funds available to TSP participants would include so-called environmental, social and governance (ESG) funds.
“We have heard requests for greater investment flexibility in all of the surveys we have done over the last eight years and we commonly hear this same viewpoint through all of our customer contact channels,” Weaver told Roll Call. “To the extent participants wish to incorporate a particular investment outlook into their portfolio, they will have the means to do so through the mutual fund window.”
Paid Family Leave Bill Advances
The House Oversight and Reform Committee on Tuesday voted along party lines to advance to the full chamber legislation to provide federal employees with 12 weeks per year of paid family leave.
The Comprehensive Paid Leave for Federal Employees Act would provide all federal workers, including U.S. Postal Service employees, with up to 12 weeks each year of paid leave to deal with a personal illness, to care for a family member suffering from illness, or in connection with a family member going on or returning from active military duty. The bill mirrors a recently enacted law providing feds with 12 weeks of paid parental leave per year, and was amended to include the loss of pregnancy, failed adoption and births by federal employees as part of a surrogacy arrangement.
Although Democrats touted the initiative as a necessary tool for protecting workers and recruiting and retaining the next generation of civil servants, Republicans balked at what they described as another unnecessary “perk” for bureaucrats. GOP lawmakers also bristled at the late inclusion of a preliminary cost estimate from the Congressional Budget Office, which found that the bill would increase direct federal spending by $53 million over the next decade, but did not include the potential cost incurred by the U.S. Postal Service or other indirect spending increases that might occur as a result of the new policy.
CBO traditionally does not provide a full score of a bill’s spending impacts until after the legislation is advanced from committee to the House floor.