The Biden administration is putting your retirement money at risk in pursuit of their awakened leftist agenda.

Andy Puzder is a former CEO of CKE Restaurants, president of 2ndVote Value Investments, Inc., and a visiting fellow at the Heritage Foundation

If you’re among the tens of millions of Americans with a 401(k), you better watch out.

The Biden administration is putting your retirement money at risk in pursuit of their awakened leftist agenda.

To avoid unwanted attention, the night before Thanksgiving, Biden’s Department of Labor released a new Orwellian rule misnamed “Caution and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.”

Don’t get distracted by the mind-numbing bureaucratic chatterbox.

The rule interprets a law requiring fund managers to make investment decisions that benefit the Americans who depend on those assets.

That is certainly both a good and reasonable policy. And once it was twofold.

Congress passed the ERISA (the Employee Retirement Income Security Act) in 1974. The law makes it crystal clear that those who manage such assets must do so “solely” in the interest of and for the “exclusive purpose” of “providing benefits to participants and their beneficiaries.”

This blatantly plain language provides no basis for investing assets to, say, prioritize saving the planet, achieving equity, or promoting wakeism in any way.

Well, enter the Biden administration and “environmental, social and governance” — or ESG — investing.

The Biden Administration Is Putting Your Retirement Money At Risk In Pursuit Of Their Awakened Leftist Agenda.

The Biden administration is putting your retirement money at risk in pursuit of their awakened leftist agenda.

ESG is a set of ill-defined, non-financial investment criteria used to screen potential investments based on how well a company is pursuing certain social or political goals.

Getting nervous?

ESG gained prominence in 2005 when a United Nations-sponsored group of international investors drew up six ‘Principles for Responsible Investment’ (PRI).

The Principles include a commitment to “include ESG issues in investment analysis and decision-making processes.”

While there is no universally accepted definition, ESG often encompasses such things as advancing the goal of net zero carbon emissions (i.e. destroying the U.S. energy sector and driving up energy prices), hiring to create diversity (aka discrimination based of race or sex rather than qualifications). , merit or character) and joining the demands of workers (also known as unionization).

According to PRI’s website, more than 5,000 financial institutions — including nearly all major U.S. asset managers — have signed up.

Since then, ESG has not built the best track record.

Earlier this year, ESG leader and advocate, investment firm Blackrock, set a record for “the largest amount of money lost by a single company in a six-month period” after it “lost $1.7 trillion in client money.” according to Bloomberg.

But these ESG losses were not limited to Blackrock.

As Bloomberg noted in May, “[i]Investors are draining money from the sector at the fastest pace in a year, while two of the largest exchange-traded funds tracking the sector… each are down at least 24% in 2021.”

Given the obvious financial risks of the ESG ideology, in January 2021 the Labor Department under President Trump’s Secretary of Labor Eugene Scalia passed a rule restricting ESG investments in ERISA-regulated retirement plans.

That rule instructs plan administrators to consider only financial performance and risk when making investment decisions.

Secretary Scalia explained the rule, writing that “[a] the fiduciary’s duty is only for retirees, because under ERISA, one “social” purpose trumps all others: retirement security for American workers.”

While There Is No Universally Accepted Definition, Esg Often Encompasses Things Like Advancing The Goal Of Net Zero Carbon Emissions (I.e. Destroying The U.s. Energy Sector And Driving Up Energy Prices) Or Hiring To Create Diversity (Aka Discrimination Against Based On Race Or Gender Rather Than Qualifications).  , Merit Or Character).

While There Is No Universally Accepted Definition, Esg Often Encompasses Things Like Advancing The Goal Of Net Zero Carbon Emissions (I.e. Destroying The U.s. Energy Sector And Driving Up Energy Prices) Or Hiring To Create Diversity (Aka Discrimination Against Based On Race Or Gender Rather Than Qualifications).  , Merit Or Character).

While there is no universally accepted definition, ESG often encompasses things like advancing the goal of net zero carbon emissions (i.e. destroying the U.S. energy sector and driving up energy prices) or hiring to create diversity (aka discrimination against based on race or gender rather than qualifications). , merit or character).

Nineteen Republican attorneys general also noted. They wrote a letter to BlackRock CEO Laurence D. Fink in August 2022, warning that his company’s ESG focus appears to violate the “one interest rule.”

It is a legal principle closely aligned with ERISA and forces fiduciaries to seek financial returns over political or social goals.

In September, the attorneys general of Louisiana and Indiana warned their state pension funds that ESG investing could violate their fiduciary duty.

The not-so-subtle warning to fund managers: Don’t get carried away with ESG, as you could be held liable for losses.

Now this new Biden rule provides some coverage. Democrats want managers to feel more confident in using investors’ assets to advance an ESG agenda that conveniently—surprise, surprise—aligns with the Democrats’ political agenda.

And in a rare act of arrogance, they label this as “caution.”

The new Biden-era rule supposedly “clarifies that retirement plan fiduciaries may consider the potential financial benefits of investing in companies committed to positive environmental, social and governance action.”

Why?

Well, according to Biden’s Labor Department, the Trump-era rule had a “chilling effect” on consideration of “environmental, social and governance factors in investments.”

But that’s just not true.

The Trump-era rule allowed consideration of ESG factors as long as it was consistent with ERISA’s requirement that such investments be “exclusively” and for the “exclusive purpose” of generating financial benefits for retirees.

As Scalia noted, “[s]sometimes ESG factors affect the value of an investment and need to be considered. It was not the intention to disregard ESG criteria when assessing an investment.

But that clearly wasn’t good enough for a Biden administration desperate to use massive amounts of money from private investors to fund the companies they like and punish those they don’t.

If not, they wouldn’t need a new rule.

1669818997 313 Why Would Bidens Waking Agenda Jeopardize Your Retirement Asks Andy

1669818997 313 Why Would Bidens Waking Agenda Jeopardize Your Retirement Asks Andy

Nineteen Republican attorneys general also noted. They wrote a letter to BlackRock CEO Laurence D. Fink (above) in August 2022, warning that his company’s ESG focus appears to violate the “one interest rule.”

A Biden Labor Department official said the quiet part out loud when they complained that the Trump rule did not allow fund managers to consider “moral” factors when considering their investments.

Whose ‘morals’ are never made clear.

But Biden’s Secretary of Labor Marty Walsh said the new rule “allows plan administrators to consider climate change and other environmental, social and governance factors when selecting retirement investments and exercising shareholder rights…”

Of course it does, and there you have it.

A Biden-era rule that allows — if not encourages — asset managers to use retiree wealth to advance the Democrats’ political and social agenda, in violation of ERISA’s specific legal language.

This is not just bad policy (and it is bad policy), it is administrative misconduct.

It’s anti-democratic. It is socialism in sheep’s clothing.

Fund managers, who have signed up for ‘environmental, social and governance’ investing, be warned: ESG investing has been woefully underperforming this year, the Supreme Court has taken a decidedly negative approach to such administrative overruns, and the Secretary of Labor will not always a democrat.

We will all be better off honoring the Americans whose money has been entrusted to the hands of the fund managers – and leaving the waking politics to the politicians.