TSP Fiduciary Security Act of 2025
SB 1368, the TSP Fiduciary Security Act of 2025, would amend federal law governing the Thrift Savings Fund, the retirement savings plan for federal employees and members of the uniformed services. The bill adds an explicit fiduciary duty requiring the Federal Retirement Thrift Investment Board, to the maximum extent practicable, to avoid investments and proxy voting that would harm U.S. national security. It also directs the Secretary of Labor, working with other national security and law enforcement officials, to issue regulations defining how that standard applies to TSP investments and voting rights.
The bill establishes a presumption that certain investments are noncompliant if they involve entities on key U.S. government restricted lists, including Communist Chinese military companies and Commerce Department entity-list companies, as well as their parents, subsidiaries, affiliates, or controlled entities. It also presumes noncompliance for certain proxy votes involving transactions, board elections, outsourcing, or strategic decisions that could affect federal contracts, defense-related production, or the transfer of sensitive technology to covered countries. In addition, the bill bars mutual funds offered through the TSP mutual fund window from investing in securities of entities based in the People’s Republic of China or their subsidiaries.
The bill would amend sections 8477 and 8438 of title 5, United States Code, creating a new national-security-based fiduciary standard for TSP management and adding reporting and review requirements. It would require Labor Department regulations, interagency consultation, annual congressional reporting, and a temporary liability shield for fiduciaries through January 1, 2027. It would also restrict the TSP mutual fund window from including funds with exposure to PRC-based entities, affecting investment options available to federal retirement savers and the entities in which TSP-related funds may invest.
No committee transcript or vote record is provided, so there is no documented floor or committee sentiment to assess. Based on the bill text, the measure is framed as a national security and fiduciary protection bill, suggesting support from lawmakers concerned about China, adversarial foreign investment, and federal retirement plan exposure to sensitive industries. The absence of recorded votes or hearing remarks means the overall political reception cannot be determined from the available materials.
The main points of contention likely concern whether the bill appropriately balances fiduciary duty, retirement returns, and national security screening. Potential critics may argue that the bill could limit diversification, reduce investment performance, or politicize retirement plan management, while supporters are likely to emphasize protecting federal workers’ savings from exposure to Chinese military-linked firms and other foreign adversaries. The bill also gives broad regulatory discretion to Labor and other agencies to define what constitutes harm to national security, which could be another area of dispute.