Biden’s 401(k) Heist by Betsy McCaughey for Town Hall
President Joe Biden’s going after 401(k) retirement accounts, risking millions of workers’ comfortable retirements.
If you put money into a 401(k), beware. Until now, the law always required fund managers entrusted with your savings to invest the money where it’s expected to get the top return for you. Period. But on Nov. 22, Biden’s Labor Department announced a rule change that goes into effect the end of January. It will allow fund managers to invest your money in the stocks of companies that favor left-wing policies, even if they earn a lower return.
It’s legalized theft. The future return on your retirement nest egg is being sacrificed to advance a woke agenda.
A lower return means you’ll have to work more years before retiring or start putting more into your 401(k). Or settle for a lesser standard of living in the final years of your life.
Biden’s new rule paves the way for your 401(k) savings to be put into what are called ESG funds. But you can stop it from happening to you if you’re vigilant.
What is ESG? “E” stands for environment, “S” for social and “G” for governance, meaning who gets hired or put on the company board. ESG funds generally invest in companies that oppose fossil fuels, support unionization and stress gender and racial diversity over merit.
From the worker’s point of view, ESG stands for Expect Slower Growth. These funds charge higher fees and often produce lower returns, especially now when oil company profits and stocks are soaring while the tech companies ESG funds tend to favor are doing poorly.
Two aspects of the Labor Department’s rule should cause you to worry. Both reverse worker safeguards adopted by the Trump administration.
First, Trump’s Labor Department stated that fund managers are obliged to put “pecuniary” considerations above other issues, such as politics. They could consider “non-pecuniary” issues only as a tiebreaker when two companies pose the same risks and opportunities for investors. Biden’s Labor Department eliminated that standard, saying it had a “chilling effect” on ESG sales.