TSP Fiduciary Security Act of 2025
Sponsored By: Senator Rick Scott
Introduced
Summary
national-security-focused fiduciary standard. This bill would require the Federal Retirement Thrift Investment Board to prioritize preventing Thrift Savings Plan investments and voting from harming U.S. national security. It would also bar certain China-linked holdings in the TSP Mutual Fund Window and provide a temporary liability shield for fiduciaries through 2026 while new rules and reporting are put in place.
Show full summary
- Federal employees and service members would see their Thrift Savings Plan managed with a primary duty to avoid investments or votes that could harm national security, including a presumption against investments tied to listed Chinese military companies and similar listed entities.
- The Federal Retirement Thrift Investment Board and its fiduciaries would face a new statutory duty focused on national security, called the D-prong, and receive protection from personal monetary liability for actions under that duty until January 1, 2027.
- The Department of Labor would have one year to write implementing regulations after enactment, following consultation with Defense, Justice, Homeland Security, and Treasury, and the bill would ban PRC-based entities from the Mutual Fund Window while requiring reports to Congress starting two years after enactment and annually thereafter.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 1 benefits, 0 costs, 3 mixed.
New national-security duty for TSP
If enacted, the bill would require TSP fiduciaries to avoid investments or shareholder votes that would harm U.S. national security. The Secretary of Labor would write rules within one year, after consulting Defense, Justice, Homeland Security, and Treasury. The rules would set standards for investments and a review process for votes. The bill would create presumptions of noncompliance for investments tied to listed Chinese military companies or BIS-listed entities. It would also treat certain votes as noncompliant, for example votes that cause a breach of a federal contract over $10,000,000, outsource critical defense technology, or elect directors with recent ties (within 5 years) to listed entities. The bill defines covered countries (including China, Russia, North Korea, Iran, Syria, Sudan, Venezuela, and Cuba) and allows adding others.
Temporary fiduciary shield for TSP
If enacted, the bill would protect TSP fiduciaries from personal money damages and civil penalties for breaches of the new national-security duty in subsection (b)(1)(D). The shield would take effect on enactment. The protection would end beginning January 1, 2027. The shield would cover only breaches of that national-security duty and not other obligations.
Annual TSP security reports to Congress
If enacted, the Secretary of Labor would report to two congressional committees not later than two years after enactment and every year after. Reports would list TSP investments and votes reviewed for national-security compliance. Reports would state the enforcement outcome for each review and explain the justification.
Ban on China investments in TSP window
If enacted, any mutual fund offered through the TSP mutual fund window would be barred from holding securities of companies based in the People's Republic of China. The ban would also cover subsidiaries owned or operated by those companies. TSP participants who use the mutual fund window could lose funds that hold Chinese issuers.
Sponsors & CoSponsors
Sponsor
Rick Scott
FL • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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