The Trump administration plans to put the kibosh on plans to invest around $4 billion in US federal retirement funds in Chinese equities amidst ongoing dispute over the COVID-19 pandemic.
A letter addressed to US Labor Secretary Eugene Scalia written on May 11 by Lawrence Kudlow, Director of the National Economic Council, states that the White House and does not want the Thrift Savings Plan to have any money invested in Chinese equities.
“Billions of dollars from our federal employees’ retirement funds in the Thrift Savings Plan (TSP) will soon be invested in Chinese companies,” said the letter.
“This action would expose the retirement funds to significant and unnecessary economic risk.”
According to the letter the Federal Retirement Thrift Investment Board’s “[departure] from the Board’s established index for the International Stock Investment Fund (I Fund) to track one that maintains Chinese equities is risky and unjustified.”
On 11 May Scalia wrote a letter to Michael Kennedy, the chair of the Federal Thrift Investment Board, expressing “grave concerns with the planned investment on grounds of both investment risk and national security.”
The TSP is a defined contribution plan for members of the United States civil service and uniformed services, and is the largest defined contribution plan in the world.
As of the end of 2018 the TSP had over USD$558 billion in assets under management for approximately 5.5 million participants.