Considering a recent Newsweek investigation exposing the possibility of members investing in Chinese companies sanctioned by the U.S. government, bipartisan U.S. lawmakers are urging the federal government to halt including such companies in its $720 billion flagship retirement plan.
For quite some time, a bipartisan coalition has harbored concerns about the potential implications of the Thrift Savings Plan’s recently introduced Mutual Fund Window.
This portal, which grants access to approximately 5,000 mutual funds, raised apprehensions among its 6.8 million members regarding the possibility of investing in companies that have been sanctioned for their alleged support of the Chinese Communist Party, involvement in human rights abuses, and pose a security threat to the United States.
The Newsweek investigation provided the initial independent verification that these sanctioned companies were included among the offered funds.
Senator Joni Ernst, a Republican from Iowa and co-sponsor of legislation prohibiting TSP assets from being invested in companies listed on the stock exchanges of China, Iran, and Russia, expressed her disappointment as her previous warnings have now been validated.
“It is regrettable that the retirement funds of our nation’s public servants are being utilized to support companies associated with the CCP, particularly those involved in activities using forced labor or possibly threatening our national security,” emphasized Representative Raja Krishnamoorthi, a Democrat from Illinois, echoing the sentiment.
According to an investigative report by Newsweek, a thorough analysis conducted by Kilo Alpha Strategies, a Washington D.C.-based consulting firm, on behalf of the news organization, revealed that a minimum of 115 mutual funds included holdings in 30 Chinese companies.
These companies were found to be listed on a group of nine watchlists administered by various U.S. agencies, such as the Department of Defense, Homeland Security, Commerce, and Treasury Departments.
The data used for the investigation was sourced from the Coalition for a Prosperous America, an esteemed research and advocacy group.
The introduction of the Mutual Fund Window (MFW) allows participants to access and invest in the expansive capital markets, just like any other American.
To be eligible, members are required to maintain a minimum account balance of $40,000 and make an initial investment of at least $10,000. Furthermore, participants can allocate a maximum of 25 percent of their fund holdings through this convenient portal.
It is important to note that there are no legal restrictions preventing any American citizen from purchasing shares in authorized companies or the funds that hold them.