Bill to Allow Federal Employees Access to Socially Responsible Investment Options

The congressman notes in 2009, three out of four large cap SRI mutual funds outperformed the Standard & Poor’s (S&P) 500 Index by an average of six percentage points, according to data analyzed by the Social Investment Forum, a national association made up of over 400 financial professionals and institutions.

Socially responsible portfolios grew by more than 324% from 1995 to 2007, compared with less than 260% growth in the overall universe of assets under professional management. At the beginning of 2007, SRI products represented more than $2.7 trillion in assets or one in nine dollars invested in financial markets in the United States.

“This measure would give federal employees the range of investment options that many state and private sector employees already have access to by allowing investments in at least one socially responsible index fund,” said SIF CEO Lisa Woll. “Investors are increasingly turning to socially responsible and sustainable investment (SRI) options because good corporate governance and performance on social and environmental issues are often indicators of financial success, good management and less risk. Many federal employees enter the government to pursue social and environmental goals and are looking for investment options that work toward — rather than against — achieving those goals.”

Currently, the TSP offers federal employees a choice of 10 funds. Five are funds dedicated to fixed asset classes — one dealing with government bonds and the other four tracking specific market indices — while the other five are “lifecycle” funds designed to adjust the allocation mix of investments among the individual funds depending on retirement dates. All TSP funds are trust funds that are regulated by the Office of the Comptroller of the Currency.