Management contracts awarded for managing billions of dollars contributed by civil service employees to the Thrift Savings Plan (TSP) for their retirement conflict with President Donald Trump’s executive order banning spending by federal departments and agencies on programs based on diversity, equity, and inclusion (DEI) concepts.

“The controversial requirements are included in the Federal Retirement Thrift Investment Board’s (FRTIB) 2020 contracts with asset managers BlackRock and State Street Global Advisors (SSGA) (now State Street Investment Management (SSIM)) to oversee the Thrift Savings Plan (TSP), which essentially operates as a 401(k) for federal employees and uniformed service members,” The Federalist reported in an August 12 story based on information provided by the American Accountability Foundation (AAF). “The FRTIB is an independent agency established in 1986 that seeks to assist these individuals ‘prepare for their retirement years via the TSP,’ according to its website.”

The story continued, “Under a section titled ‘Deliverables,’ the contracts specify that BlackRock and SSGA/SSIM must provide a series of reports to the FRTIB Contracting Officer’s Representative (COR) that ‘shall be reviewed and updated every year to reflect changes in policies and procedures and any applicable regulatory guidance.’ These reports are broken up into four timetables — daily, monthly, quarterly, and annual — and mandate the firms to submit varying information required by the agency for each period.”

“It’s under the ‘Annual Reports’ section in which the FRTIB requests multiple data points that tie into left-wing DEI ideology. Among the information sought, the agency requires that BlackRock and SSGA/SSIM each ‘Provide a report on the investment manager’s use of women/minority owned brokers,’ ‘Provide data on the firm’s management composition as it relates to women/minorities,’ and ‘Provide a summary of the firm’s diversity philosophy,’” The Federalist report added.

The problem with the TSP mandating DEI activities among its contractors is that Trump’s March 2026 executive order required termination of all such programs within federal departments and agencies because under DEI concepts “employees, applicants, or contracting parties are treated differently, separated, or singled out based on their race or ethnicity, rather than treated equally and objectively based on their merit and without regard to their immutable characteristics.”

The Trump EO added that “DEI activities are not only unethical and often illegal, but also cause inefficiencies, waste, and abuse within entities that engage in such practices. Specifically, DEI activities impose artificial costs in hiring, promotion, and operations by precluding implementation of merit-based principles; creating excessive workforce turnover by elevating immutable characteristics over job performance; and jeopardizing the sort of employee collaboration and problem-solving that is essential to fostering efficient and high-quality work.”

In addition, the EO claimed that “DEI activities also create unnecessary costs by reducing the pool of available labor by artificially limiting companies to hiring or promoting certain individuals, suppliers, or intermediaries based on their race or ethnicity. These costs are inevitably passed on to the federal government when it contracts with companies who engage in racially discriminatory DEI activities, or who use subcontractors who do so.”

The TSP appears to escape the EO’s mandate because it manages billions of dollars invested by civil service employees but without a specific congressional appropriation for that purpose. As a result, the TSP is not sufficiently subject to the Federal Acquisition Regulations (FAR) to be covered by the EO.

Tom Jones, AAF’s president, told The Federalist that “‘a significant portion’ of the ‘millions’ of federal employees and retirees enrolled in TSP are conservatives who don’t support DEI in contracts involving stewardship of their finances. These people ‘probably don’t want these kinds of crazy left-wing policies in the contracts that manage their money. They want to just make as much money as [they] can so [they] can retire.’”

The Washington Stand asked for comment from the FRTIB and from the U.S. Office of Management and Budget (OMB) that oversees compliance by federal departments and agencies with presidential directives, but none was received by press time.

The TSP was created by President Ronald Reagan and Congress in 1984 as part of an historic reform of the federal government’s retirement program for the 2.3 million civil service employees. The old Civil Service Retirement System (CSRS) — a defined benefit program that guaranteed pensions based on a percentage of an employee’s highest three-year salary average — was replaced by the Federal Employees Retirement System (FERS) that is instead based on a defined contribution by the employee.

The changeover from the defined benefit to defined contribution was necessitated by old system’s $560 billion unfunded liability. To equal the $560 billion in 1984 today would require nearly $1.8 trillion. All federal workers hired after January 1, 1987, are automatically covered by the FERS system. Both CSRS and FERS are administered by the U.S. Office of Personnel Management (OPM).