Welp, who’d a thunk that Joe Biden would use the first veto of his miserable presidency to shoot down a bipartisan proposal that would have protected Americans’ pensions by blocking pension fund managers from making investment decisions based on so-called climate and other such nonsense?
Other than everyone in the country, I mean.
At issue is so-called “ESG investing,” which means sustainable investing that considers environmental, social, and governance factors to judge an investment’s financial returns and its overall impact.
Don’t let the left pull the wool over your eyes, here: Financial ESG returns are far less important to the left than its moving-target definition of “overall impact.”
As a former CFP (Certified Financial Planner) for nearly 30 years, this insanity hurts my investment-minded head. Moreover, irresponsible factors that have zero upside impact on the potential ROI —return on investment — do a great disservice to workers covered by pensions.
Let’s first lay out the two types of retirement funds.
A defined contribution plan, such as a 401(k) or IRA, is a type of retirement plan in which the employee, employer, or both make contributions on a regular basis. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts plus any investment earnings on the funds in the account. Employees allocate their contributions, which employers (if they make “matching” contributions), mirror in individual employee accounts, though some companies reserve the right to invest a stated percentage of corporate contributions in the company’s common stock.
On the other hand, defined benefit plans promise a specified monthly benefit at retirement, generally based on a formula in which years of service and average earnings determine the monthly benefit at retirement, meaning workers covered by pensions have no say in how pension funds are invested.
The number of defined benefit plans has dramatically decreased over the years, based on high administration costs, and even more so, because the responsibility for underfunded pensions rests solely with the employer.
Here’s a pretend case in point, for illustration purposes only. Let’s assume the recently collapsed and super-woke Silicon Valley Bank had had a pension — it didn’t — and thank God for the sake of bank employees.
As reported by HeatMap, more than 60 percent of community solar financing nationwide involved Silicon Valley Bank.
The bank’s website bragged about its particular support of solar, hydrogen, and energy-storage companies. It provided more than half a billion dollars in revolving credit to Sunrun, the country’s largest residential solar company. (Sunrun did not respond to a request for comment by press time.)
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: Dude, you have no idea who or what you’re mumbling 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
A complete crock of crap.
The Bottom Line
While Biden can lie with zero impunity and even less conscience, facts are facts. Any argument in support of ESG investing either ignores or lies about more than a few investment fundamentals.
Now, it’s one thing if an individual makes personal investments based on whatever the hell factors he or she wants, but a defined benefit plan manager has a fundamental fiduciary responsibility to make sound investment decisions with the primary goal of protecting future retirement benefits for company employees.
And Joe Biden?
As is the case with everything he touches, Biden remains blinded by the darkness of woke.
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