Ted Cruz Introduces Bill to Block DEI Influence in Federal Retirement Funds

U.S. Senator Ted Cruz (R) has introduced the Stop TSP ESG Act, legislation aimed at restricting how professional asset managers can use federal employee retirement funds when casting corporate shareholder votes.

The bill targets the Thrift Savings Plan (TSP), the retirement program for U.S. government employees, which holds more than $1 trillion in assets. Much of that money is managed by firms such as BlackRock Capital Advisers and State Street Global Advisors, two major asset managers that frequently use their proxy voting power to support Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) initiatives.

Cruz argues that those practices conflict with the financial interests of federal workers whose retirement savings are invested in TSP mutual funds.

"Americans deserve assurance that their retirement savings are being invested in the most fiscally responsible ways. Instead, investment fund managers are using the retirement savings of federal employees to push ESG and DEI agendas that conflict with their investors' interests," said Cruz. "The Stop TSP ESG Act would end that practice and restore accountability, and I urge my colleagues to pass it expeditiously."

Supporters of the bill argue that it would ensure asset managers prioritize financial performance when voting on corporate matters. The proposal does not change investment options available within the TSP but would prohibit fund managers from using TSP-managed shares to advance non-financial policy goals during proxy votes.

The bill now awaits consideration in the Senate, where similar efforts to curb ESG-oriented investing have gained support among Republican lawmakers.