President Biden is playing politics with Hoosiers’ retirement savings. We’re fighting to stop it at the state and federal level.
A new rule from Biden’s Labor Department allows fiduciaries to consider factors other than financial return when making investment decisions.
Because this rule deals with the ERISA law, all employer-sponsored 401(k) programs fall under this rule. We’re talking about 152 million Americans’ retirement savings and $11.7 trillion.
Under the previous rule, fiduciaries could only consider financial factors like achieving the highest rate of return.
The intention of this rule is for fiduciaries to be able to invest based on ESG — environment, social, or corporate governance factors. ESG funds tend to be investments that align with the political preferences of the Biden administration on topics like climate change and social justice.
In other words: this Biden rule makes it so money managers can pursue a progressive political agenda using your money – likely leaving you a lower rate of return.
Over the past five years, ESG funds underperformed the broader market, averaging a 6.3 percent return compared to 8.9 percent return.
Indiana is taking the lead against this agenda to politicize Americans’ retirement savings.
Here’s a closer look at what we’re doing at the federal and state level to protect your retirement.
On the federal level, I’m challenging Biden’s rule in Congress. I wrote the challenge and have won the support of every Republican Senator and one Democratic Senator, Joe Manchin of West Virginia.
Challenges like this under the Congressional Review Act are guaranteed a vote on the floor of the House and the Senate, and can pass with a simple majority.
If this challenge passes, which it is expected to, it will be a searing rebuke of President Biden’s plan to jeopardize Americans’ retirement for his own political goals.
These challenges aren’t just a strong message to the administration, they’re also a message to the courts that Congress disapproves of the President’s rule.
Previously, I successfully passed a challenge to Biden’s vaccine mandate for private businesses in the Senate, which was cited by the Supreme Court in their decision to overturn the mandate as the most noteworthy action in Congress on the issue.
In Indiana, we are currently debating whether or not public and private equity managers should be allowed to use ESGs in deciding the fates of Hoosier civil servants who have dedicated their lives to public service and now find their hard-earned retirements subject to the whims of political “wokeness.”
Large asset management firms are trampling on the rights of lawful small businesses that further our 2nd Amendment civil liberties, Indiana farmers, and our state’s energy producers who keep homes warm and our hospitals lit.
Large financial corporations and their lobbyists are trying to scare the public into thinking that passing this bill would cost our pensioners money. However, there are many studies that show that ESG investing results in long term losses for the investee.
As the Indiana’s Chief Investment Officer, it is my duty to protect the assets of all Hoosiers.
This fight against these large fund managers is about making sure that our retirees don’t have to choose between paying for their medicine or paying for their electricity. Our Indiana pensioners served our state for many years and the least we can do is protect them with the same passion with which they served us.
By allowing large public and private equity asset managers to use ESG policies to make decisions, we renege on the promise we made to those who dedicated their lives to serving their fellow citizens. Myself, along with conservative leaders in the General Assembly, are committed to stopping this from happening.
* * *
At a time when Americans’ retirement savings have already taken such a hit from market downturns and the Biden inflation crisis, the last thing D.C. should be doing is putting 401(k)s at risk of a lower return to favor a political agenda.
As inflation continues to cut into every Americans’ retirement plans, the 2.6 percent lower return on ESG would make a world of difference for Hoosiers’ savings.
We’re proud to stand up for Hoosiers against this policy from the Biden administration that’s jeopardizing Americans’ retirement to support their progressive policy goals.