25 States Sue Biden Admin Over Rule Allowing 401(k) Managers To Put Savings Into ESG Funds

Keep your sticky woke paws off my money.

Amen!



:dappa:

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A coalition of 25 states is suing the Biden administration over a Department of Labor (DOL) rule that affects millions of retirement accounts, the attorneys general of multiple states involved in the lawsuit announced on Wednesday.


The new rule set to take effect on Jan. 30 allows 401(k) managers to invest clients’ money in environmental, social, and governance (ESG) funds, a move that 25 states argue violates the Employee Retirement Income Security Act of 1974 (ERISA).

According to the lawsuit, the rule puts at risk the retirement savings accounts of 152 million workers, or two-thirds of the U.S. population, totaling $12 trillion in assets, in the name of promoting the Biden administration’s climate agenda.

It does this, the states argue, by making changes to the rule that authorizes fund managers (fiduciaries) to consider and promote “nonpecuniary benefits” (benefits not related to money or financial gain) when making investment decisions.

“Contrary to Congress’s clear intent, these changes make it easier for fiduciaries to act with mixed motives. They also make it harder for beneficiaries to police such conduct,” the lawsuit states (pdf).

The 25 states argue in the lawsuit that the Supreme Court concluded that ERISA requires fund managers to put the financial benefits of investments first and not any nonpecuniary benefits. The lawsuit also contends that the high court directly tied the term “benefits” to “income” and doesn’t cover nonpecuniary benefits.



ESG Investment Strategies ‘Impose a Leftist Social and Economic Agenda’
Indiana Attorney General Todd Rokita said ESG investment strategies are not designed to maximize financial returns for clients.

“Rather, they have been concocted entirely to impose a leftist social and economic agenda that cannot otherwise be implemented through the ballot box,” he said in a statement on Wednesday.

ESG funds generally invest in companies that oppose fossil fuels, support unionization, and stress gender and racial diversity over merit, even if it results in a lower return for the client. ERISA is in place to safeguard American workers’ retirement savings and ensure that fund managers make investments with the highest potential return for their clients.





FJB :bidenwagtongue: