ALEC in The American Conservative: State Pension Funds Gamble Workers’ Retirement On ESG
Woke ideology has captured public pension funds, even in red states. How did it happen, and who is fighting back?
KEVIN STOCKLIN
APRIL 15, 2022
Progressives have succeeded in manipulating the $5.8 trillion state pension system into a vehicle for imposing their political agenda, while simultaneously fostering a lucrative system of patronage around it to co-opt non-believers into playing along.
State pension fund managers who have declared that they will include environmental and social justice goals in their investment decisions collectively control more than $3 trillion in retirement assets and include the five largest public pension plans in the U.S. Among them are The California Public Employees Retirement System (CalPERS), California State Teachers Retirement System (CalSTRS), the Teachers Retirement System of Texas, New York City pension funds, New York State Common Retirement Fund, Maryland State Retirement and Pension System, and the New York State Teachers Retirement System.
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In an attempt to de-politicize their pensions, state officials are working to hold fund managers personally liable if they misuse retirees’ money. Last week, a conference of state officials, working through the American Legislative Exchange Council (ALEC), crafted model legislation that compels state pension fund managers to invest solely according to financial considerations. It also prohibits fund managers from voting the shares owned by the pension fund “to further non-pecuniary or non-financial social, political, ideological or other goals.”
If pension fund managers “use politically based investing that costs pensioners their return on investments,” said ALEC Chief Economist Jonathan Williams, “people need to be held accountable.” Maximizing returns becomes more critical in light of what ALEC reports is a $5.8 trillion shortfall in states’ ability to pay their pension obligations.