Meanwhile, some of the people who work hardest in service to their fellow Americans are forced to expose their retirement savings to the very things they believe they are protecting us from, at least if they want the money in their plan to track stocks. That’s because the index funds that the T.S.P. mirrors own everything in a particular market sector, say all 500 of the biggest companies in the United States by market capitalization. If you want to make money from that sector in the T.S.P., you have to take the bad companies with the good, however you define each term.
I asked around at the surgeon general’s office and the Centers for Disease Control and Prevention about tobacco stocks. No one in a position of power would comment or return my calls or emails. But I did hear from two spokeswomen, who sent me identical one-sentence statements. They both pointed out the obvious (individuals in the T.S.P. can’t own individual stocks) and dodged my questions about overall employee sentiment about tobacco industry exposure.
There is another solution in the works for government employees: a mutual-fund window. This mechanism doesn’t replace any existing funds; instead, it allows plan participants onto an investment platform where they can choose from most any mutual fund, including hundreds of E.S.G. offerings.
Congress told the savings plan’s board in 2009 that it could offer a window, but progress soon stalled. “The stock market was in free fall, and everyone was scared witless,” said Kim Weaver, a T.S.P. spokeswoman.
The market rebounded in the first half of the 2010s, and federal employees and various advocacy groups started making their feelings known. By 2015, the Federal Retirement Thrift Investment Board’s executive director at the time, Greg Long, was ready to recommend a change. “As the clamor of the voices swell, it will be increasingly difficult to defend the core fund menu,” he wrote in a memo to his overseers.
They agreed with him. The beauty of a fund window is that it doesn’t take anything away from anyone. Moreover, the only thing its availability endorses is the idea of more choice. Federal employees can bet on energy stocks via a mutual fund or shun them as they wish, or just stick with the exposure to the stock indexes that is already part of the plan.
Even so, prying the mutual fund window open is taking quite a while. Congress has pushed several other big T.S.P. initiatives to the front of the line, and it will probably be at least two years before participants will get to climb through that window and see what the world of mutual funds looks like on the other side.
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