Thread: Biden Administration's Climate Agenda Will Damage Two-Thirds Of US Retirement Account

Biden Administration's Climate Agenda Will Damage Two-Thirds Of US Retirement Accounts: Kobach

SUNDAY, FEB 05, 2023 - 12:00 PM
Authored by Katie Spence via The Epoch Times (emphasis ours),

The Biden administration’s new Department of Labor (DOL) rule allowing 401(k) managers to invest in Environmental Social Governance (ESG) funds will harm two-thirds of America’s retirement accounts, according to Kansas Attorney General Kris Kobach in an interview that aired on Newsmakers by NTD and The Epoch Times on Feb. 1.

President Joe Biden speaks about the U.S. economy at Steamfitters Local 602 in Springfield, Va., on Jan. 26, 2023. (Andrew Caballero-Reynolds/AFP via Getty Images)

Kobach said that the Jan. 30 change was being done “in the name of this left-wing partisan agenda.”
He said, “There should be no partisan agenda when it comes to investing our funds. It should be done based purely on financial return without any regard to whether it helps left-wing causes or right-wing causes.”
Kansas is one of the 25 states suing the Biden administration over its rule allowing 401(k) managers leeway to invest in ESG funds by stipulating that the managers can decide to invest by considering “nonpecuniary benefits.”
Meaning they can make investing decisions where the benefits aren’t related to financial gain.

Republican Kris Kobach is Kansas’s attorney general. (Courtesy of Kobach campaign)“What this latest rule does is it basically says you can consider these non-pecuniary factors when deciding where to invest the retirees’ funds,” Kobach said.
“And our lawsuit says, ‘Hey, wait a minute, that violates the express terms of [the Employee Retirement Income Security Act] ERISA,’ which is the 1973 Act that President [Gerald Ford] signed into law that is designed to protect the employee retirement savings in these funds.
“And we’re saying, ‘Look, you, as an agency—and it’s the Department of Labor under Biden that’s doing this—as an agency, you can enact regulations, but your regulations cannot contradict the exact express terms of the law.
“Section 404 A of the law says very clearly that [401(k) managers] have to act for the economic benefit of the retiree, for the person whose assets are being invested.”
An ‘Illegal Rule’

According to Kobach, the new ESG rule is illegal as it didn’t go through Congress.
“It’s illegal … an agency cannot contradict the terms of the law that gives the agency the authority to act,” Kobach said.
“If President Biden wanted to do this, he should try to change the law. He should try to change the terms of the ERISA statute and allow ESG considerations to weigh into the investment of these funds.
“I think that would be a horrible idea because it would mean we would gain less return on our retirement assets. But he can’t do this unilaterally. As an executive, he can’t use his agency’s regulatory authority to do this. He has to go through Congress to do it.”
Circling back to the impact of the ESG rule, Kobach added, “[The rule] basically means that [fund managers] can take into account things other than financial value, financial return, or pecuniary interests.
Financial Return Only

“So, it opens up the door for the investment adviser who thinks, ‘Well, you know, I think, you know, saving the Earth from climate change is a long-term interest that my investment strategy ought to consider.’
“Well, that’s not what they’re supposed to be doing. They’re supposed to be looking at the financial return and the financial return only.”
Kobach added about the impact on retirement accounts, “What that means in real terms is that companies that have anything to do with oil or fossil fuels, anything to do with firearms, anything to do, increasingly now with things like agriculture, and the beef industry, are going to be excluded.
“And that means that in almost every case, the return on investment for those funds is going to be lower because you’re taking investment options off the table.”
Kobach said he’s confident the states’ case against Biden will succeed.
Bipartisan Pushback

In addition to the states’ lawsuit challenging the legality of the Biden administration’s new ESG rule, every GOP Senator—plus Democrat Joe Manchin (W.Va.)—signed on to a disapproval resolution, protesting against the DOL directive.
The resolution alleges that the Biden administration is putting the pensions of 152 million Americans at risk to support “climate and social justice.”
“A number of studies have shown that ESG investing policies have worse rates of return. For example, a study by UCLA and NYU found that over the past five years, ESG funds underperformed the broader market, averaging a 6.3 percent return compared to 8.9 percent return respectively.
“Additionally, in comparison to other investment plans, ESG investors generally end up paying higher costs for worse performance,” a statement from Senator Mike Braun (R-Ind.) says.
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Biden Administration's Climate Agenda Will Damage Two-Thirds Of US Retirement Accounts: Kobach | ZeroHedge

Pea Brain Simpleton

Eye for an Eye; all of his Assets must be seized.

Well, we can stop investing in 401(k) and just invest in our Individual Retirement Accounts.

Instead of employers doing the matching, give us a pay increase to invest the money in an IRA.

FJB, your green new deal, and your deviant agenda to take OUR money and control us!