Federal employees may soon have the option of adding real estate stock to their retirement fund portfolios, thanks to legislation being considered by Congress.

In announcing the Real Estate Investment Thrift Savings Act, which has bipartisan support, Rep. Jon C. Porter (R-Nev.) noted that a real estate option can be a useful tool for greater diversification of an investment portfolio. Stressing the importance of providing Federal Thrift Savings Plan participants with a range of choices similar to private sector 401(k) plans, he said, “Our federal employees deserve no less.”

Currently, thrift participants only have five investment choices: government bonds and securities, corporate bonds, common stock, the Small Capitalization Stock Index and the International Stock Index, notes Jay Hyde, spokesperson for the National Association of Real Estate Investment Trust, which strongly supports the legislation. “Interestingly, the most popular [TSP investment choice] is government bonds,” he says, suggesting that REITs have performed well, and like government bonds, offer investors a reliable income.

While it is still too early to predict the impact, Hyde says that TSP, with 3.5 million participants, is one of the largest public pension funds in the nation. Hyde pointed to the California Public Employee Retirement System, for an indication of the impact this bill could have on the REIT industry. CalPERS, with 1.4 million participants, currently has $11.7 billion invested in real estate.