Social Investment Forum Applauds Introduction of Bill Allowing Federal Employees to Select SRI Retirement Option
At Least 17 States Already Allow State Employees to Consider SRI Choice for Retirement Funds
WASHINGTON--The introduction of the Federal Employees Responsible Investment Act (FERIA), is a significant milestone for socially responsible and sustainable investing (SRI), proposing to grant federal employees the opportunity to select an SRI option in their Thrift Savings Plan (TSP).
The Social Investment Forum (SIF) commends Rep. Jim Langevin, the original sponsor of the bill, (D-R.I.) and original co-sponsors Reps. Patrick Kennedy (D-RI), Dennis Kucinich (D-OH), Nita Lowey (D-NY) and James McGovern (D-MA) for their leadership on this legislation.
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.
SIF CEO Lisa Woll said: “This measure would give federal employees the range of investment options that many state and private sector employees already have access to by allowing investments in at least one socially responsible index fund. Investors are increasingly turning to socially responsible and sustainable 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 social and environmental goals and are looking for investment options that work towards -- rather than against -- achieving those goals.”
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.”
Socially responsible portfolios grew by more than 324 percent from 1995 to 2007, compared with less than 260 percent growth in the overall universe of assets under professional management. At the beginning of 2007, SRI products represented more than $2.7 trillion in assets or one in nine dollars invested in financial markets in the United States.
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 TSP, which had a reported balance of $244.4 billion at the end of its last fiscal year in December 2009.
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.
EDITOR'S NOTE: Find a related news release from Rep. Langevin's office at:
http://langevin.house.gov/issues/economy/2010/09/langevin-introduces-responsible-investing-act.shtml. To read H.R. 6183, visit: http://www.thomas.gov/cgi-bin/query/z?c111:H.R.6183.
The Social Investment Forum (http://www.socialinvest.org) advances investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. The Social Investment Forum is the U.S. membership association for professionals, firms, institutions and organizations engaged in socially responsible and sustainable investing (SRI). SIF members support SRI through such strategies as portfolio selection analysis, shareholder advocacy and community investing.