Who would have thought that Joe Biden would use his first veto to block a bipartisan proposal that would have protected Americans’ pensions, and prevented pension fund managers from making decisions about climate investment?
The issue is “ESG investing”, which refers to sustainable investing that takes into account environmental, social, and governance factors in order to evaluate an investment’s financial return and overall impact.
Do not let the left fool you. Here, financial ESG returns are less important than the left’s moving-target definitions of “overall effect.”
This insanity has been a problem for me as an investment-minded CFP (Certified Financial Planner) for almost 30 years. Irresponsible factors, which have no upside impact on the potential ROI (return on investment), are a huge disservice to pensioners.
Let’s start by defining the two types.
A defined contribution plan (such as a 401k, or IRA) is a retirement plan where the employer, employee, or both contribute on a regular basis. Participants can set up individual accounts. Benefits are based on the amount credited to these accounts and any investment earnings. Employers match contributions made by employees. Employees can allocate contributions to their individual accounts. However, some companies may choose to invest a certain percentage of corporate contributions in common stock.
Defined benefit plans, on the other hand, promise a specific monthly benefit at retirement. They are generally based upon a formula that takes into account years of service and average earnings. This means that workers who receive pensions do not have any control over how their pension funds will be invested.
Due to high administrative costs and the fact that underfunded pensions are the sole responsibility of the employer, the number of defined-benefit plans has dropped dramatically over the years.
This is a fake case for illustration. Let’s suppose that the super-woke Silicon Valley Bank had a pension. It didn’t. Thank God for bank employees.
According to HeatMap, Silicon Valley Bank was responsible for more than 60% of all community solar financing in the United States.
On its website, the bank boasted about its support for energy storage, hydrogen, and solar companies. Sunrun, the largest residential solar company in the country, was provided with more than half a million dollars in revolving credits. Sunrun did not respond by press time to a request for comment.
So it’s not a stretch to suggest that the wokified bank would’ve invested pension funds in a similar fashion.
Yet, Joe Biden astonishingly appears to believe that saddling a pension manager with making ESG decisions as a priority is safer for employees than removing the woke handcuffs, as the bipartisan group of lawmakers proposed.
I just vetoed my first bill. This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like. Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not.
Earth to Joe: You don’t know who you are or what you’re talking about.
I just vetoed my first bill.
This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like.
Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not. pic.twitter.com/PxuoJBdEee
— President Biden (@POTUS) March 20, 2023
This is a complete mess of crap.
Biden may lie with no impunity or conscience, but facts are facts. ESG investing arguments ignore or lie about more than just a few investment fundamentals.
It’s fine for an individual to invest based on what he or she likes, but a manager of a defined benefit plan has a fiduciary obligation to make sound investments with the primary goal of ensuring future retirement benefits.
Biden, as is the case with all he touches remains blinded in the darkness of woke.