TSP Bill Seeks to Prevent Fund from Investing in China
Earlier this month, Rep. Randy Fine (R-FL) introduced the TSP Fiduciary Security Act of 2025, legislation focused on preventing the federal government’s Thrift Savings Plan from being invested in “Countries of Concern” by incorporating national security interests into the fiduciary responsibilities of the management of the TSP.
It is a House companion bill to one introduced in the Senate in April 2025 by Sen. Rick Scott (R-FL), which has been referred to the Committee on Homeland Security and Governmental Affairs.
The 401(k)-like TSP manages over $1 trillion in assets for federal civil service employees, uniformed services members, and retirees—with approximately 7.2 million total participants including 4.1 million actively contributing.
According to a Feb. 4 press release about the bill from Rep. Fine, “investing money in adversary nations, especially their military companies, only enhances the resources they need to not only compete with the United States, but develop weapons that can be used against our military.”
The release said the legislation would put the United States’ national security first by:
• Preventing investments in entities on certain lists maintained by the Department of War and the Department of Commerce.
• Ensuring that major industry does not suffer significant losses due to the regulations, including exceptions for impacts to the defense industry, emerging technology, and critical technology.
• Prohibits TSP investments in any Chinese-based companies through the mutual fund window.
Fine added that he remains committed to working with members of both parties to bring this bill into fruition and protect the interests of the American people.
“It is in the United States’ best interest to prevent the TSP from being invested in countries of concern, such as China,” Rep. Fine said. “My bill would prevent excess funds from falling into the hands of our adversaries and stop them from being used to develop weapons that could be turned against the United States.”
“Americans’ retirement dollars should never fall into the hands of Communist China, a self-declared enemy nation bent on destroying America and our way of life. Doing so puts Americans’ futures at risk,” said Sen. Scott (R-FL). “Our TSP Fiduciary Security Act builds on our work to ensure the hard-earned money that our federal workers invest in their retirement is kept out of enemies’ reach by further preventing the TSP from investing in companies based in Communist China.”
Background dates to 2019
The legislation reinforces the fiduciary duty of the Federal Retirement Thrift Investment Board (FRTIB), which manages the TSP, stating that it must act in the best interest of the fund’s beneficiaries. Specifically, the board is required to:
• Prevent investments from harming U.S. national security.
• Ensure that any voting rights associated with TSP investments also support national security interests.
Currently, the TSP’s International “I” Fund does not have exposure to Chinese markets. It tracks the MSCI ACWI IMI ex USA ex China ex Hong Kong Index, a benchmark that specifically excludes China and Hong Kong from its emerging markets representation.
In 2019, the FRTIB proposed shifting the I Fund to track a broader international index that included Chinese companies, drawing criticism from lawmakers concerned about national security. Following the backlash, the board opted for the index that excludes China.
Without legislation like the TSP Fiduciary Security Act of 2025, the board could theoretically revisit an index that includes Chinese or other restricted-country equities. The proposed bill would permanently bar such investments, removing that discretion from FRTIB and locking in the exclusion of countries deemed security risks.
Read the full text of the TSP Fiduciary Security Act of 2025 here.
TSP reports record millionaires
In January, it was reported by FedSmith that the Thrift Savings Plan had a record-high 194,722 millionaires—those with seven-figure TSP account balances—as of the end of 2025. Another 136,594 TSP participants had between $750,000 and $999,000 in their accounts. The largest single TSP account balance was $9.96 million.
Thanks to strong stock market returns and steady contributions, the number of TSP millionaires has grown substantially in the past 5 years. It first topped six figures—with 112,880—at the end of 2021.
SEE ALSO:
• TSP’s I Fund Gets New Benchmark Excluding Chinese Investments
• Trump Squashes TSP Plan to Invest in China
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.