New bill will give federal employees the option to invest retirement savings in funds free of fossil fuel resources
WASHINGTON, D.C. – Oregon’s Senator Jeff Merkley today introduced the Retirement Investments for a Sustainable Economy (RISE) Act of 2019, which gives federal employees the ability to divest from the fossil fuel industry—and reduce the financial liability of fossil fuel asset losses—by offering a Climate Choice investment option for the Thrift Savings Plan (TSP).
“Americans are seeing the growing climate crisis driving catastrophic wildfires, deadly storms and hurricanes, and devastating droughts, and lots of people don’t want to wait around for these risks to grow,” said Merkley. “If people want to get their money out of the industry driving climate chaos, they should be able to. It’s time for Congress to give millions of federal employees the power to ensure their retirement funds are invested in a less risky and more sustainable, socially responsible portfolio.”
Studies have shown that portfolios without fossil fuels have outperformed those with fossil fuels in recent years. That is why in April 2019, Senator Merkley and Senator Maggie Hassan (D-NH) wrote a letter to the U.S. Government Accountability Office (GAO) to examine the risks to federal workers of continuing fossil fuel investments as climate chaos continues to intensify.
Creating a fossil-fuel free option would not only allow TSP participants the ability to align their retirement investments with their values, it could also help participants mitigate their own financial risks. As the climate threat grows and more and more of the world transitions to clean and renewable energy, holding shares in fossil fuel companies may risk bigger and bigger losses for investors.
As of December 2018, the TSP has approximately 5.5 million participants with approximately $558 billion in assets, and is the largest defined contribution plan in the world.