US SIF Praises Bill Allowing Federal Employees to Pick Socially Responsible Investment (SRI) Retirement Option
WASHINGTON--The recent introduction of HR 2130, the Federal Employees Responsible Investment Act (FERIA), is a significant milestone for federal employees and for sustainable and responsible investing (SRI). The legislation would grant federal employees the opportunity to select an SRI option in their Thrift Savings Plan (TSP).
US SIF commends original bill sponsor Rep. Jim Langevin (D-R.I.) and original co-sponsors Reps. Dennis Kucinich (D-OH), Nita Lowey (D-NY), and James McGovern (D-MA) for their leadership on this legislation.
Action by the federal government is long overdue. US SIF noted that at least 17 states -- Alaska, California, Connecticut, Florida, Illinois, Indiana, Massachusetts, Montana, New York, Nevada, New Mexico, North Carolina, South Carolina, Tennessee, Vermont, Washington and Wisconsin -- already offer their employees the option of investing retirement dollars in SRI funds. Many private companies also offer these options to their employees.
US SIF CEO Lisa Woll said: “This measure would give federal employees the range of investment options that many state and private sector employees already enjoy by allowing investments in at least one socially responsible index fund. Investors are increasingly turning to sustainable and responsible investment (SRI) options because good corporate governance and performance on social and environmental issues are often indicators of financial success, good management and less risk. Many federal employees enter the government to pursue mission based careers and are looking for investment options that work towards -- rather than against -- achieving those goals.”
According to the US SIF Foundation's 2010 Report on Socially Responsible Investing Trends in the United States, $3.07 trillion, or one in eight dollars, under professional management in the United States followed sustainable investing strategies at the beginning of 2010, an increase of more than 34 percent since 2005. Over the same period, the broader universe of professionally managed assets increased by just 3 percent.
If that same percentage of federal retiree TSP dollars moved into the SRI option, the resulting 13 percent would add up to over $30 billion, based on the Thrift Savings Plan FY 2009 ending balancing of $244.4 billion.
Rep. Langevin said: “The reckless actions of financial institutions over the past few years provide a clear illustration of why we need to place a greater importance on good corporate governance. That is why I reintroduced the Federal Employees Responsible Investment Act -- a bill I have sponsored for the past five years. Investing in companies that are committed to corporate responsibility and sustainability will have a positive impact on our financial system, as well as empower federal employees to reward companies that share their values.”
The proposed legislation would direct the Federal Retirement Thrift Investment Board (FRTIB) to select a “Corporate Responsibility Index” (CRI) as an option for Thrift Savings Plan (TSP) investment purposes. The new CRI would include companies that meet strict financial criteria, in addition to having strong corporate governance, sustainable environmental policies and practices, solid workplace relations, positive community involvement, safe products, and respect for human rights around the world.
The TSP is a retirement savings plan for members of the uniformed services and civilians who are employed by the United States Government. The Federal Retirement Thrift Investment Board administers the TSP. Today, a total of more than 4 million current and former federal employees participate in the federal Thrift Savings Plan.
Currently, the TSP offers federal employees a choice of 10 funds. Five are funds dedicated to fixed asset classes -- one dealing with government bonds and the other four tracking specific market indices -- while the other five are "lifecycle” funds designed to adjust the allocation mix of investments among the individual funds depending on retirement dates. All TSP funds are trust funds that are regulated by the Office of the Comptroller of the Currency.
ABOUT US SIF
US SIF advances investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. US SIF is the U.S. membership association for professionals, firms, institutions and organizations engaged in socially responsible and sustainable investing (SRI). US SIF members support SRI through such strategies as portfolio selection analysis, shareholder advocacy and community investing. (http://www.ussif.org)
Patrick Mitchell, (703) 276-3266 or firstname.lastname@example.org.
CONTACT FOR SENATOR JAMES LANGEVIN:
Kirtley Fisher, (202) 225-2735 or Kirtley.Fisher@mail.house.gov