The federal retirement thrifty savings and Investment Board said last week that the bipartisan proposal, if passed, would deprive investors who participate in the board's thrifty savings plan (TSP) of an excellent opportunity to earn better returns. Similar to the 401 (k) plan, TSP has about $600 billion of assets under management.
Senators Marco Rubio and Jeanne Shaheen introduced the TSP on November 6, hoping to limit the flow of US capital to Chinese companies on the grounds of security concerns.
Frtib wrote to supporters of the bill saying the legislation was discriminatory and, as stated in writing, would prevent the commission from offering any international investment options to its participants.
Rubio's office denied that.
"Not only is frtib's analysis of the bipartisan TSP bill very flawed, but its claim that there is no international index that meets the standards of the bill is totally wrong," Rubio spokesman Nick iacovella said in a statement to Reuters late Monday.
Iacovella said the bill would only prevent frtib from investing in Chinese A shares.
"The committee is either unaware of many international indices that do not include China's a shares, or is deliberately misleading," he said, without citing any indices as an example.
Frtib decided in 2017 to change the tracking index of its international stock fund into MSCI global investable market index excluding the United States and foreign countries, which covers 99% of the global stocks, including Chinese listed stocks; currently, the tracking index of the fund does not include Canada and emerging markets.
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