I asked around at the surgeon general’s office and the Centers for Disease Control and Prevention about tobacco stocks. No one in a position of power would comment or return my calls or emails. But I did hear from two spokeswomen, who sent me identical one-sentence statements. They both pointed out the obvious (individuals in the T.S.P. can’t own individual stocks) and dodged my questions about overall employee sentiment about tobacco industry exposure.
There is another solution in the works for government employees: a mutual-fund window. This mechanism doesn’t replace any existing funds; instead, it allows plan participants onto an investment platform where they can choose from most any mutual fund, including hundreds of E.S.G. offerings.
Congress told the savings plan’s board in 2009 that it could offer a window, but progress soon stalled. “The stock market was in free fall, and everyone was scared witless,” said Kim Weaver, a T.S.P. spokeswoman.
The market rebounded in the first half of the 2010s, and federal employees and various advocacy groups started making their feelings known. By 2015, the Federal Retirement Thrift Investment Board’s executive director at the time, Greg Long, was ready to recommend a change. “As the clamor of the voices swell, it will be increasingly difficult to defend the core fund menu,” he wrote in a memo to his overseers.
They agreed with him. The beauty of a fund window is that it doesn’t take anything away from anyone. Moreover, the only thing its availability endorses is the idea of more choice. Federal employees can bet on energy stocks via a mutual fund or shun them as they wish, or just stick with the exposure to the stock indexes that is already part of the plan.
Even so, prying the mutual fund window open is taking quite a while. Congress has pushed several other big T.S.P. initiatives to the front of the line, and it will probably be at least two years before participants will get to climb through that window and see what the world of mutual funds looks like on the other side.
What remains to be seen is how many of them will actually climb through.
Many employers that work with Vanguard offer similar windows, and in 2017, only 1 percent of participants used them. Eight percent of the entities offering this option didn’t get a single employee taking them up on it. Fidelity reports similar figures: Just 2.7 percent of participants use the window.