Bill Overview
Title: Federal Employees Sustainable Investment Act
Description: This bill establishes a new fund—the Corporate Responsibility Stock Index Fund—as an investment option under the Thrift Savings Plan. The Corporate Responsibility Stock Index Fund must be invested in a stock portfolio designed to replicate the performance of a commonly recognized, passively managed index comprised of stocks that meet certain minimum criteria related to corporate responsibility.
Sponsors: Rep. Schiff, Adam B. [D-CA-28]
Target Audience
Population: People eligible for the Thrift Savings Plan
Estimated Size: 5600000
- The Thrift Savings Plan (TSP) is the retirement savings plan for federal employees in the United States, meaning it directly impacts U.S. federal employees and retirees.
- There are approximately 2.1 million federal employees in civilian roles, plus military personnel who are also eligible for the TSP, amounting to around 5.6 million people in total.
- The bill provides a new investment option for all these individuals, potentially affecting their retirement savings choices and financial outcomes.
Reasoning
- The Federal Employees Sustainable Investment Act primarily impacts federal employees and those eligible for the Thrift Savings Plan (TSP).
- Although the policy offers a new investment option, the direct financial impact may vary based on individual investment choices and awareness.
- Given the limited policy budget, initial awareness campaigns and administrative costs will constrain direct outreach, likely influencing how many people engage with the new fund.
- People's wellbeing scores will not only be affected by potential financial returns but also by their perceptions of corporate responsibility and sustainable investing.
Simulated Interviews
Federal Government Accountant (Washington D.C.)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I've been following trends in sustainable investing and think it's a great addition to have this as an option in the TSP.
- As a numbers person, I'm curious how this fund will perform compared to the others.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Federal Air Traffic Controller (Virginia)
Age: 33 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- I don't know much about investing, but I'm interested in options that align with good values.
- I'll consider the new option if someone explains it well.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Federal Park Ranger (California)
Age: 28 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- The idea of supporting corporations that do well is appealing, and I might shift some funds to this new option.
- I'd prefer my money supports companies that care about the environment.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 9 | 8 |
Retired Federal Employee (Texas)
Age: 55 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I'm retired and count on my savings, so I don't plan to change my investments drastically, even if this new option is available.
- Sustainable funds sound nice but aren't my top priority.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Military Personnel (Florida)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- I want my retirement to be as secure as possible, so I'll evaluate how this new option performs before deciding.
- If the sustainability-focused fund performs well, I'll definitely move some of my investment.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Federal HR Specialist (New York)
Age: 61 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 11/20
Statement of Opinion:
- Retirement is my priority, but I'm happy to see TSP reacting to issues like responsibility.
- If I had longer until retirement, I'd probably explore this more.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 5 |
Federal IT Specialist (Ohio)
Age: 37 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 13/20
Statement of Opinion:
- I'm all for growth and profit, so unless this fund proves itself, I'll likely stick with my current strategy.
- I'm not convinced yet that an index fund can match the returns I'm aiming for.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 6 |
Federal Procurement Officer (Georgia)
Age: 48 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- It's reassuring to have options that align with my values, and I'll work with my advisor to incorporate this if it makes sense.
- Diversifying with social responsibility in mind could be good.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Federal Environmental Scientist (Washington)
Age: 50 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- This policy is perfectly aligned with my values, and I'll transition much of my current portfolio to this fund if it becomes available.
- I'm excited about the potential positive impacts this fund could have.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 10 | 9 |
| Year 3 | 10 | 9 |
| Year 5 | 10 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 8 |
Federal IT Security Specialist (Colorado)
Age: 30 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- I'm just starting to get into investing, and having an option focused on responsible companies sounds like a good starting point.
- I need more information, but I'm open to adjusting my approaches.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Cost Estimates
Year 1: $10000000 (Low: $7000000, High: $15000000)
Year 2: $5000000 (Low: $3000000, High: $8000000)
Year 3: $5500000 (Low: $3500000, High: $8500000)
Year 5: $6000000 (Low: $4000000, High: $9000000)
Year 10: $6500000 (Low: $4500000, High: $9500000)
Year 100: $10000000 (Low: $7000000, High: $15000000)
Key Considerations
- The cost of setting up and maintaining the new fund option must be considered against the benefits to up to 5.6 million federal employees.
- The bill aligns with a growing trend towards ethical investing, which may influence the popularity and uptake of the Corporate Responsibility Stock Index Fund.
- The primary administrative costs will occur in the first year, followed by reduced ongoing expenses.
- Reviewing the performance and acceptance of this fund over time will be crucial in assessing its long-term viability and potential impacts.