New bill would create socially responsible fund for federal workers and retirees
By Paula Aven Gladych
A new bill introduced in the Senate and House by Democratic lawmakers last week would give federal employees and retirees the ability to invest their retirement dollars in socially responsible companies.
The Federal Employees Responsible Investment Act, sponsored by Rep. Jim Langevin, D-R.I., and Sen. Sheldon Whitehouse, D-R.I., would require the administrators of the federal Thrift Savings Plan to create a Corporate Responsibility Stock Index Fund for participants in the plan.
Congress found that 84 percent of mutual fund investors would more likely invest in a fund if one of its principles was to invest in companies that engage in ethical business practices in terms of operations and reporting. Seventy-one percent of investors agree that companies that operate with higher levels of integrity carry less investment risk, and 67 percent of investors believe that these companies deliver better investment returns.
In 2012, $3.74 trillion were invested in socially responsible funds in the U.S., the bill stated.
The bill proposes the formation of a Corporate Responsibility Stock Index Fund that tracks an index that is made up of stocks that have been analyzed and selected based on set criteria, including corporate governance; environmental practices, including greenhouse gas emissions and contribution to climate change; workplace relations and benefits; product safety and impact; international operations and human rights; involvement with repressive regimes; and community relations.
Originally published on BenefitsPro.com