119-s1368

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1368 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1368

 To amend title 5, United States Code, to address the responsibilities 
 of fiduciaries with respect to the Thrift Savings Fund, and for other 
 purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 April 9, 2025

 Mr. Scott of Florida introduced the following bill; which was read 
 twice and referred to the Committee on Homeland Security and 
 Governmental Affairs

_______________________________________________________________________

 A BILL

 To amend title 5, United States Code, to address the responsibilities 
 of fiduciaries with respect to the Thrift Savings Fund, and for other 
 purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``TSP Fiduciary Security Act of 
2025''.

SEC. 2. FINDINGS.

 Congress finds the following:

    (1) The Federal Retirement Thrift Investment Board has a 
 fiduciary duty to manage the Thrift Savings Fund in the best 
 interest of the beneficiaries of the Fund.

    (2) The principal beneficiaries of the Thrift Savings Fund 
 are the civil servants of the United States, and members of the 
 uniformed services, who are tasked with defending the national 
 security of the United States.

    (3) The duty of the Federal Retirement Thrift Investment 
 Board to manage the Thrift Savings Fund in the best interests 
 of the beneficiaries of the Fund includes a duty not to harm 
 the national security of the United States.

SEC. 3. FIDUCIARY RESPONSIBILITIES WITH RESPECT TO THRIFT SAVINGS FUND.

 

Section 8477 of title 5, United States Code, is amended--

    (1) in subsection

    (b)

    (1) --
        (A) in subparagraph
        (B) , by striking ``; and'' and 
 inserting a semicolon;
        (B) in subparagraph
            (C) , by striking the period at 
 the end and inserting ``; and''; and
            (C) by adding at the end the following:
 ``
            (D) to the maximum extent practicable, by preventing the 
 investments of the Thrift Savings Fund (or portions thereof), 
 and the exercise of voting rights associated with any such 
 investments, from harming the national security of the United 
 States.''; and

    (2) in subsection

    (e) , by adding at the end the following:
 ``

    (9)
        (A) Notwithstanding any other provision of this subsection, no 
fiduciary shall be personally liable for any monetary damages, or be 
assessed any civil penalty, under this subsection with respect to a 
breach of the requirement under subsection

    (b)

    (1)
            (D) .
 ``
        (B) Subparagraph
        (A) shall cease to have effect beginning on 
January 1, 2027.''.

SEC. 4. REVIEW OF THRIFT SAVINGS FUND FOR COMPLIANCE WITH FIDUCIARY 
 DUTIES.

    (a) In General.--

Section 8477

    (f) of title 5, United States Code, is 
amended--

    (1) by inserting ``

    (1) '' after ``

    (f) ''; and

    (2) by adding at the end the following:
 ``

    (2)
        (A) Not later than 1 year after the date of enactment of this 
paragraph, the Secretary of Labor, in consultation with the Secretary 
of Defense, the Attorney General, the Secretary of Homeland Security, 
and the Secretary of the Treasury, shall prescribe regulations to carry 
out subsection

    (b)

    (1)
            (D) with respect to each of the following:
 ``
            (i) The investments of the Thrift Savings Fund, which 
 shall include the establishment of standards by which 
 compliance with subsection

    (b)

    (1)
            (D) with respect to the 
 investments of the Thrift Savings Fund (or portions thereof) 
 shall be determined.
 ``
            (ii) The exercise of voting rights associated with the 
 investments of the Thrift Savings Fund (or portions thereof).
 ``
        (B) The regulations prescribed under subparagraph
        (A)
            (ii) shall 
include--
 ``
            (i) the establishment of a process by which the exercise 
 of voting rights described in subparagraph
        (A)
            (ii) shall be 
 reviewed by the Secretary of Labor, in consultation with the 
 Secretary of Defense, the Attorney General, the Secretary of 
 Homeland Security, and the Secretary of the Treasury, for 
 compliance with subsection

    (b)

    (1)
            (D) with respect to the 
 exercise of those rights; and
 ``
            (ii) the establishment of standards by which compliance 
 with subsection

    (b)

    (1)
            (D) with respect to the exercise of 
 voting rights described in subparagraph
        (A)
            (ii) shall be 
 determined, including the factors contributing to a 
 determination that a covered vote would not comply with 
 subsection

    (b)

    (1)
            (D) .
 ``
            (C) For the purposes of any regulation prescribed under 
subparagraph
        (A) , the Secretary of Labor shall presume that--
 ``
            (i) an investment of the Thrift Savings Fund (or portions 
 thereof) does not comply with subsection

    (b)

    (1)
            (D) if the 
 investment invests in--
 ``
            (I) an entity included on--
 ``

    (aa) the list of Communist Chinese 
 military companies maintained under 

section 1237

    (b) of the Strom Thurmond National Defense 
 Authorization Act for Fiscal Year 1999 (50 
 U.S.C. 1701 note); or
 ``

    (bb) the entity list maintained by the 
 Bureau of Industry and Security of the 
 Department of Commerce and set forth in 
 Supplement No. 4 to part 744 of title 15, Code 
 of Federal Regulations; or
 ``
            (II) a parent, subsidiary, or affiliate of, or an 
 entity controlled by, an entity described in subclause
            (I) ; and
 ``
            (ii) an exercise of voting rights associated with any 
 investments of the Thrift Savings Fund (or portions thereof) 
 does not comply with subsection

    (b)

    (1)
            (D) if that exercise of 
 voting rights is a covered vote with respect to a proposal that 
 would--
 ``
            (I) approve or ratify a transaction, including a 
 transaction described in subparagraph
            (D) 
            (ii) 
            (I) , that 
 would cause, or would reasonably be expected to cause, 
 an entity to which the covered vote applies to--
 ``

    (aa) breach any contract with the Federal 
 Government to which the entity is a party, and 
 under which the consideration provided to the 
 entity over the course of the entire contract 
 is more than $10,000,000, if the entity has 
 otherwise complied with all applicable laws and 
 regulations in fulfilling the responsibilities 
 of the entity with respect to the contract;
 ``

    (bb) significantly reduce the production 
 of, or the capital expenditure or research and 
 development expenditure with respect to, any--
 ``

    (AA) industrial resources, 
 critical technology items, or materials 
 that are essential to the national 
 defense (as those terms are defined in 
 

section 702 of the Defense Production 
 Act of 1950 (50 U.S.C. 4552)); or
 ``

    (BB) emerging and foundational 
 technology identified by the President 
 under 

section 1758 of the Export 
 Controls Act of 2018 (50 U.S.C. 4817); 
 or
 ``
            (cc) outsource or substantially sell, 
 whether to any affiliated entity or joint 
 venture, or by contract, to any entity located 
 in a covered country, any--
 ``

    (AA) industrial resources, 
 critical technology items, or materials 
 that are essential to the national 
 defense (as those terms are defined in 
 

section 702 of the Defense Production 
 Act of 1950 (50 U.S.C. 4552)); or
 ``

    (BB) emerging and foundational 
 technology identified by the President 
 under 

section 1758 of the Export 
 Controls Act of 2018 (50 U.S.C. 4817); 
 or
 ``
            (II) elect to the board of directors of any 
 entity an individual who--
 ``

    (aa) is a director, officer, employee, or 
 affiliate of any entity described in clause
            (i) 
            (I) ;
 ``

    (bb) at any time during the 5-year period 
 preceding the date on which that election 
 occurs, was as described in item

    (aa) ; or
 ``
            (cc) a reasonable investor would believe 
 supports any proposal described in subclause
            (I) .
 ``
            (D) In this paragraph--
 ``
            (i) the term `covered country' means--
 ``
            (I) the People's Republic of China, the Russian 
 Federation, North Korea, Iran, Syria, Sudan, Venezuela, 
 or Cuba;
 ``
            (II) any country, the government of which the 
 Secretary of State determines has repeatedly provided 
 support for acts of international terrorism pursuant 
 to--
 ``

    (aa) section 1754
            (c) (1)
        (A) of the Export 
 Control Reform Act of 2018 (50 U.S.C. 
 4813
            (c) (1)
        (A) );
 ``

    (bb) section 620A of the Foreign 
 Assistance Act of 1961 (22 U.S.C. 2371);
 ``
            (cc) section 40 of the Arms Export 
 Control Act (22 U.S.C. 2780); or
 ``
            (dd) any other provision of law; or
 ``
            (III) any other country that the Secretary of 
 Labor, in consultation with the Secretary of Defense, 
 the Attorney General, the Secretary of Homeland 
 Security, and the Secretary of the Treasury, designates 
 as posing an undue or unnecessary risk to the national 
 security of the United States; and
 ``
            (ii) the term `covered vote' means a vote in favor of (or 
 an abstention with respect to) a proposal to--
 ``
            (I) approve or ratify a transaction involving an 
 entity, including--
 ``

    (aa) any sale of, or other disposition of 
 (whether in a single or a series of 
 transactions) assets or capital stock; and
 ``

    (bb) any merger, consolidation, joint 
 venture, partnership, spin-off, reverse spin-
 off, dissolution, restructuring, 
 recapitalization, liquidation, or any other 
 business combination or strategic transaction; 
 or
 ``
            (II) elect an individual to the board of 
 directors of the entity that is the subject of the 
 proposal.''.

    (b) Review of Exercise of Voting Rights; Report to Congress.--

Section 8438 of title 5, United States Code, is amended--

    (1) in subsection

    (f) --
        (A) by inserting ``

    (1) '' after ``

    (f) ''; and
        (B) by adding at the end the following:
 ``

    (2) For the purposes of paragraph

    (1) , a review of the exercise 
of voting rights for compliance with 

section 8477

    (b)

    (1)
            (D) , including 
under the regulations prescribed under 

section 8477

    (f)

    (2) , shall not be 
considered to be the exercise of voting rights associated with the 
ownership of securities by the Thrift Savings Fund.''; and

    (2) by adding at the end the following:
 ``
            (i) Not later than 2 years after the date of enactment of this 
subsection, and annually thereafter, the Secretary of Labor shall 
submit to the Committee on Homeland Security and Governmental Affairs 
of the Senate and the Committee on Oversight and Government Reform of 
the House of Representatives a report regarding--
 ``

    (1) for the year covered by the report, the investments 
 of the Thrift Savings Fund (or portions thereof), and the 
 exercise of voting rights associated with any such investments, 
 that have been reviewed for compliance with 

section 8477

    (b)

    (1)
            (D) ; and
 ``

    (2) the outcome with respect to enforcement of each 
 review conducted under paragraph

    (1) and a justification for 
 that outcome.''.

SEC. 5. PROHIBITION ON INVESTMENT OF THRIFT SAVINGS FUND SUMS IN 
 ENTITIES BASED IN THE PEOPLE'S REPUBLIC OF CHINA THROUGH 
 THE TSP MUTUAL FUND WINDOW.

 

Section 8438

    (b)

    (5) of title 5, United States Code, is amended by 
adding at the end the following:
 ``
        (E) A mutual fund accessible through a mutual fund window 
authorized under this paragraph may not include an investment in any 
security of--
 ``
            (i) an entity based in the People's Republic of China; or
 ``
            (ii) any subsidiary that is owned or operated by an 
 entity described in clause
            (i) .''.
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