VIDEO: How NOT to be a victim of politically motivated investment schemes
As inflation continues to rise- making it harder for families to make ends meet – and threatening the retirement savings of millions of Americans – families who depend on state pensions for their retirement now have an additional threat. That new threat is politically motivated investment schemes that bring in lower investment returns for retirees.
This week on ALEC TV Livestream, Catherine Mortensen, ALEC Public Affairs Director and Lee Schalk, ALEC Vice President of Policy spoke with Representative Gary Smith of South Carolina about politically motivated investment schemes and ALEC model policies.
Catherine Mortensen: As inflation continues to rise- making it harder for families to make ends meet – and threatening the retirement savings of millions of Americans – families who depend on state pensions for their retirement now have an additional threat. That new threat is politically motivated investment schemes that bring in lower investment returns for retirees.
You recently gave an interview to a local reporter in your state talking up our newest ALEC model policy that would protect state pension funds from politically motivated investment schemes – sometimes called ESG policies – which stands for Environmental Social Governance – a kind of wonky way of saying the WOKE agenda.
How did this issue get onto your [Rep. Smith] radar? And thank you for putting ALEC’s name out there and sharing our model policy.
Representative Gary Smith: Well Catherine, thank you and Lee for allowing me to be here today. If you’re in policy, if you’re a legislator, if you’ve been doing this for any time, you would have to be under a rock not to have heard about this and to not be aware of what’s going on. It’s in publications, it’s something that’s been a part of the discussion for a while now. When it first came to my radar, it was from a local group that is a chapter of the Center for Self-Governance. They had been looking at this issue and we got together to have a meeting at a friend of mine’s house to talk about the research and the things that were going on throughout the country. After that, I started to get some emails about the issue and we had already started working on putting together a policy and the ALEC model policy was a big help in that regard. As always, ALEC is at the forefront of a lot of these issues that we’re concerned about in our state and state governments. They’re always on the cutting edge of these things so very appreciative to ALEC for what they have done. They’ve been a big help to us in putting this together and again happy to be a part of the show today and just to summarize the model policy that we’re talking about today.
Lee Schalk: To summarize the model policy that we’re talking about today – the model is called the State Government Employee Retirement Protection Act. It was a model policy passed by the Tax and Fiscal Policy Task Force at ALEC. It says that pension fund managers cannot invest the funds for any other reason but to maximize returns and do so in the best interest of pensioners. If pension fund managers are using politically based investment strategies with these state pension funds, they need to be held accountable and that’s what this model policy aims to do.
Catherine Mortensen: Representative, I noticed, in the article that caught our attention a few weeks ago, a state representative, Ann Thayer from South Carolina, was the lead sponsor on a bill that is similar to the ALEC model policy. She had about 30 Republican co-sponsors but ultimately it did not make it to the governor’s desk. You were quoted as saying you want to see the ALEC model policy, or something close to it, reintroduced next session. Why do you think we need an expanded version of what was already introduced in South Carolina?
Representative Gary Smith: One of the things that I told the reporter when we had the interview was something I use a great deal in my conversations and debates on the house floor – ideas have consequences and bad ideas have victims. When you look at the whole idea and the concept of ESGs, social justice and climate change, all of those sorts of things are contrary to what we have always been used to in the financial world and how we deal with banks and the institutions of finance. It’s usually based upon your credit history, your financial responsibility and those sorts of things – things that make sense in taking and judging you as a credit risk or a good financial risk. What we’re talking about with this is just totally different from that. It doesn’t matter if you have a good credit history, it doesn’t matter if you are a good financial risk, it doesn’t matter if you have a good financial history – what is important to them is how do you actually score on their scorecard for social justice – financial history has no relevance.