H.R. 7357: TSP Fiduciary Security Act of 2026

This bill is called the TSP Fiduciary Security Act of 2026, and its purpose is to modify existing laws related to the management of the Thrift Savings Fund (TSP). The TSP is a retirement savings plan for federal employees and members of the uniformed services. The key provisions of the bill are as follows:

1. Fiduciary Responsibilities

The bill reinforces the fiduciary duty of the Federal Retirement Thrift Investment Board, which manages the TSP, stating that they must act in the best interest of the fund's beneficiaries, primarily U.S. civil servants and military personnel. Specifically, the board is required to:

• Prevent investments from harming U.S. national security.
• Ensure that any voting rights associated with TSP investments also support national security interests.

2. Liability Protections

The legislation includes a provision that, under certain conditions, fiduciaries will not be personally liable for any breaches of this newly established duty to protect national security. However, this provision would expire on January 1, 2027.

3. Compliance Review Requirements

The bill requires that a review process be established to ensure compliance with the national security-related fiduciary duties. The Secretary of Labor, in consultation with other government officials, must create regulations that:

• Establish standards for assessing whether investments threaten national security.
• Include processes for reviewing the exercise of voting rights associated with TSP investments.

Furthermore, there are specific stipulations regarding investments in entities associated with countries deemed a threat, such as China, Russia, North Korea, and others.

4. Restrictions on Investments

The bill also explicitly prohibits any investment of Thrift Savings Fund money in entities based in the People's Republic of China, including their subsidiaries. This applies to investments made through a mutual fund option within the TSP.

5. Reporting Requirements

Following the implementation of these rules, the Secretary of Labor is required to submit annual reports to Congress detailing:

• The investments made by the TSP and their compliance with the fiduciary responsibilities aimed at protecting national security.
• The outcomes of the reviews conducted on investments and voting rights.

Relevant Companies

• BABA - Alibaba Group: As a major company based in China, Alibaba may be directly impacted, as the bill prohibits the investment of TSP funds in entities based in China.
• TCEHY - Tencent Holdings: Similar to Alibaba, Tencent operates in China and could be affected by restrictions on TSP investments.
• NTES - NetEase: Another Chinese entity that may be impacted due to the investment prohibitions outlined in the bill.