FRANKFORT, Ky. (December 29, 2021) – Kentucky State Treasurer Allison Ball submitted a public comment in opposition to a proposed United States Department of Labor rule. The comment condemned the administrative rule which would promote harmful and risky investment guidelines for employee retirement plans by enabling ERISA fiduciaries to make investment decisions based on non-finance related data like climate change and social issues. Treasurer Ball joined state attorneys general and financial officers representing 23 states in the opposition.
“I strongly oppose ERISA fiduciaries valuing activism and politics over fiscal responsibility,” Treasurer Ball said. “Permitting subjective environmental, social, and governance considerations to guide investment decisions will be at the detriment of plan beneficiaries. The long-term financial security of retirees should not be sacrificed in favor of irresponsible political action.”
The proposed rule change would allow plan sponsors and investment managers to implement environmental, social, and governance (ESG) investment strategies in retirement plans as a default option. ESG funds dissolve the traditional fiduciary obligations owed to beneficiaries and instead prioritize social and political action.
The letter states: “It is our position that social and political issues should not be considered by fiduciaries in employee retirement savings investment decisions. We are not opposed to any person or entity considering ESG or other social factors when investing their own money; individuals and companies may promote social causes through their investments to the extent they desire. But we are opposed to investment managers and employers being encouraged or mandated to consider ESG factors and protected from legal action when they do.”
Attorney General Daniel Cameron and Auditor Mike Harmon also signed onto the letter.
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