HR7357-119

What This Bill Does

This bill changes the duties of Thrift Savings Plan fiduciaries by requiring them, to the maximum extent practicable, to avoid TSP investments and proxy-voting actions that harm U.S. national security. It directs the Labor Department, after consulting Defense, Justice, Homeland Security, and Treasury, to issue regulations within one year. Those rules must presume noncompliance for investments in Communist Chinese military companies, BIS Entity List companies, affiliates or controlled entities, and certain votes that could break large federal contracts, reduce defense-critical production or research, transfer critical technology to covered countries, or install directors tied to listed entities. It also bans TSP mutual-fund-window funds from investing in securities of PRC-based entities or their subsidiaries.

Who Benefits and How

Federal employees, uniformed service members, and other TSP participants benefit from a fiduciary standard that explicitly treats national-security exposure as part of retirement-plan oversight. U.S. defense contractors and suppliers of critical technologies benefit when TSP voting power cannot be used to undermine production, research, or federal contracts. Labor, Defense, Justice, Homeland Security, and Treasury gain a formal review structure for identifying risky investments and votes.

Who Bears the Burden and How

The Federal Retirement Thrift Investment Board, TSP fiduciaries, and mutual-fund-window managers must screen investments, proxy votes, affiliates, subsidiaries, covered-country ties, and listed entities before acting. The Labor Department must write regulations and file annual reports to Senate HSGAC and House Oversight. PRC companies, BIS Entity List companies, and covered-country entities lose access to TSP-related investment flows, while participants may see a narrower mutual-fund menu.

Key Provisions

• Adds a fiduciary duty for TSP officials to prevent investments or voting rights from harming U.S. national security where practicable.
• Directs Labor to issue national-security investment and proxy-vote regulations after consulting Defense, Justice, Homeland Security, and Treasury.
• Presumes noncompliance for investments in Communist Chinese military companies, BIS Entity List companies, affiliates, controlled entities, and certain covered-country risk scenarios.
• Requires annual Labor reports to congressional oversight committees on reviewed investments, reviewed votes, and enforcement results.
• Bars TSP mutual-fund-window investments in securities of PRC-based entities or subsidiaries owned or operated by those entities.