A number of Republican led states are suing the Biden administration over a new rule that forces retirement investment managers to favor leftist Environmental, Social and Governing [ESG] friendly companies over profits or return on investment for retirees. This of course puts the retirement of millions at risk and turns retirement accounts into a social experiment for rabid climate activists.
“The Department of Labor rule, first announced in November, reverses restrictions put in place under the Trump administration. It is now facing a lawsuit from Utah and two-dozen other states, who argue that it violates the Employee Retirement Income Security Act (ERISA) of 1974, which says retirement plan assets must be held for the exclusive purpose of providing benefits to participants in the plan, and that fiduciaries must act solely in the participants’ interests,” Fox Business reports. “The GOP-led states say that by focusing on social and political agendas, plan managers will be compromising the growth potential of participants’ accounts.”
“The lawsuit was filed Thursday in federal court in Texas. The court has yet to issue a ruling on the request for an injunction. If granted, the rule would be blocked for the duration of the case, depending on any subsequent appeal,” the report continues.
The Job Creators Network has also been working to oppose the rule.
“Environmental, social, and governance (ESG) considerations should not be a factor for businesses when deciding how to manage the assets of employee 401k plans. Retirement accounts should be invested with the sole purpose of achieving strong returns, not social engineering. This proposed rule from the Department of Labor—which amounts to obvious government overreach and opens the door to activist investing—would not only compromise the financial stability of retirees but would harm the small business community,” Job Creators Network Foundation CEO Alfredo Ortiz released in a statement late last year. “Unlike large corporations, small businesses don’t have the excess resources to navigate the ESG minefield—leaving Mainstreet with a competitive disadvantage. If the Biden administration doesn’t scrap the rule, the Job Creators Network Foundation is prepared to explore legal options.”
If you’re looking for a primer on what exactly ESG is and how damaging it is, see here.