Project 2025 Targets TSP and Pensions: ESG Bans, China Divestment, and Multiemployer Plan Cuts
Project 2025 proposes to purge ESG investments from the Thrift Savings Plan (TSP), ban TSP investments in China, and radically restructure multiemployer pensions—including breaking joint liability—while increasing PBGC premiums. These changes would reduce retirement security for federal employees and union workers, with no direct veteran carve-out but deep indirect effects on career veterans and their families.
Project 2025's retirement proposals are a three-front assault on the financial security of working people who served. First, the TSP—the retirement backbone for nearly all federal employees, including millions of career veterans—would be stripped of any investment option that considers environmental, social, or governance (ESG) criteria. The plan calls for removing 'mutual fund windows' that offer ESG funds, and even suggests the Department of Labor bring enforcement actions against BlackRock and State Street for managing TSP assets while also supporting ESG investing. This is not about responsible investing; it is about enforcing a political litmus test on savings. For veterans and federal workers who rely on the TSP for a dignified retirement, this means fewer choices and lower returns in a world where ESG factors increasingly correlate with long-term financial performance. The proposal to ban all TSP investments in Chinese companies—already partially executed by the FRTIB in 2023—injects national security rhetoric into what should be a straightforward fiduciary matter, confusing geopolitical posturing with prudent portfolio management.
Second, the multiemployer pension reforms strike at the heart of unionized labor, including many trades and industries where veterans work after service. The plan would break 'joint and several liability'—the legal principle that makes all employers in a multiemployer plan responsible for funding shortfalls. That reform would leave individual workers holding the bag when an employer goes under. The plan also demands that troubled plans stop making new promises entirely, effectively freezing benefits, and that variable rate premiums on underfunding be increased while eliminating the per-participant cap. The stated goal is to protect taxpayers from another bailout like the $85 billion rescue in the American Rescue Plan. But the hidden cost is that financially healthy plans would subsidize the PBGC's failures, and workers in distressed industries—coal, trucking, construction—would see their retirement dreams evaporate. The PBGC's own data shows its multiemployer deficit exploded from under $500 million in 2008 to over $65 billion by 2017; these reforms would shift that risk onto the backs of the very workers who can least afford it.
Finally, Project 2025's demand that public pension plans disclose assets and liabilities using the Treasury yield curve discount rate—rather than the more generous actuarial assumptions currently used—would artificially widen reported underfunding and invite political panic. States like California, New York, and Illinois would see their reported pension deficits skyrocket overnight, fueling calls for benefit cuts and higher employee contributions. Veterans who work in state and local government—police, fire, corrections, VA support staff—would find their pensions branded as 'unaffordable' by a metric designed to produce alarm. The cumulative effect of these proposals is to dismantle the collective-bargaining infrastructure that has, for generations, provided retirement security to middle-class Americans. Veterans who built careers in federal service or in union trades deserve better than a retirement system gutted by political ideology.
The humanitarian alternative
Instead of politicizing TSP investment options, the federal government should strengthen fiduciary standards that require fund managers to consider all material financial factors—including ESG risks—without ideological blacklists. The multiemployer pension system should be reformed through targeted technical fixes—closing loopholes that allow chronic underfunding, improving transparency on plan health, and strengthening the PBGC's authority to intervene early—while preserving joint and several liability as the cornerstone of collective bargaining. For China divestment, Congress should work with the FRTIB to implement the existing 2023 prohibitions on Chinese military companies, but not extend a blanket ban that would harm diversification and returns. These reforms would protect retirement security without imposing political tests on savings or shifting risk onto workers.
Original source — excerpted
project2025 Project 2025 ch. 20: Department of Veterans Affairs (pp 641-643)"— 608 — Mandate for Leadership: The Conservative Promise l DOL should reverse efforts to politicize the TSP by removing “mutual fund” windows that encourage ESG, and should clarify the fiduciary duties of the TSP . Recent efforts by congressional Democrats and the Biden Administration to politicize the TSP by offering selective “mutual fund” windows that encourage ESG should be reversed by DOL, and the fiduciary duties of the TSP should be clarified by the department to preclude ESG investments absent individual stock selection by the participant. The TSP is managed under contract by private-sector fund managers. Its current managers are BlackRock and State Street Global Advisers. Both of these managers have demonstrated a public commitment to use the funds they manage to advance ESG. l The federal government should follow the lead of multiple state governments in removing their pension funds from fund managers such as BlackRock and State Street Global Advisers, and contract with a competitive, private-sector manager that will comply with its fiduciary duties. l DOL should also consider bringing enforcement actions against BlackRock and State Street Global Advise…"