Millions of federal workers will soon have the option to direct their retirement savings to funds that incorporate environmental, social and governance factors in their investment decisions.
The Thrift Savings Plan, a $762 billion defined contribution plan akin to a 401(k) for most federal government workers, will become the latest and the largest retirement plan to offer participants ESG investment options.
By next summer, the plan's 6.3 million participants from federal civilian agencies and uniformed services will gain access to a mutual fund window in which they can designate portions of their accounts to any of more than 5,000 funds, including some that consider ESG factors, according to the Federal Retirement Thrift Investment Board, which administers the TSP.
"I'm excited," Rep. Andy Levin, D-Mich., said in an interview. Members of Congress are federal employees and TSP participants. Levin indicated he plans to make the selection himself when it becomes available.
"TSP is doing this because there is a demand for it," said Levin, who has a background in pensions from his prior labor union work. He also helped establish a green energy company in Michigan before entering Congress. "ESG aligns people's long-term financial interest with their values, and it makes investors feel good."
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