Project 2025 Targets TSP and Multiemployer Pensions — Veterans' Retirement Security at Risk
Project 2025 proposes to strip TSP of ESG-focused mutual fund windows, sever ties with BlackRock and State Street, prohibit TSP investments in China, and radically restructure multiemployer union pensions. For veterans who rely on the TSP, this means retirement savings subordinated to ideological investment bans. For union workers in multiemployer plans, it means broken joint-and-several liability and higher premiums with no structural guarantee.
The Thrift Savings Plan is the cornerstone of retirement for millions of federal employees and uniformed service members. Yet Project 2025 wants to turn it into a political weapon. Its proposal to purge ESG-oriented mutual fund windows from the TSP is a transparent attempt to impose an ideological litmus test on retirement savings — regardless of what fiduciary duty actually demands. The plan also calls for terminating contracts with BlackRock and State Street, even though both firms are global managers selected through competitive procurement. The result would be a narrower, less diversified TSP that may underperform, costing veterans real returns. Worse, the push to prohibit TSP investments in Chinese companies — even the ones the FRTIB has already blacklisted — creates a moving target that politicizes the board's fiduciary role and invites further congressional micromanagement.
On the multiemployer pension side, the proposals are even more damaging. Multiemployer plans are the bedrock of many unionized industries — construction, trucking, hospitality — that employ thousands of veterans. Project 2025's plan to end joint-and-several liability in these plans would effectively allow employers to walk away from unfunded promises, pushing risk onto workers. It also recommends sharply increasing variable-rate premiums and eliminating the per-participant cap on PBGC premiums — punishing well-funded plans and raising costs for everyone. The proposal to ban troubled plans from making new pension promises would freeze benefit accruals, leaving workers in limbo. And requiring fair-market-value disclosure using the Treasury yield curve — a method that inflates liability estimates — could force plans to adopt overly conservative investment strategies or face even higher contributions. The $85 billion bailout in the American Rescue Plan did not fix the structural problems, but these reforms would inflict new pain rather than address root causes like rising healthcare costs and declining employer participation.
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.
Grounded in
- TSP G Fund and ESG: What Federal Employees Need to Know
- FRTIB Prohibits TSP Investments in Chinese Military Companies
- PBGC Announces Fiscal Year 2022 Financial Results
- The American Rescue Plan Act's Pension Bailout: Costs and Reforms
- State Street and BlackRock Face ESG Backlash from Red States
- GAO Report: TSP Investments in China
- Multiemployer Pension Reform: Proposed Changes to Funding Rules
- Project 2025's Chapter on Labor: Pension and TSP Reforms
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…"