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Biden’s 401(k) Heist

401(k)

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.

The Biden rule says 401(k) managers are “not prohibited from selecting the investment, or investment course of action, based on collateral benefits other than investment returns.” Politics can take priority. The new rule cites Biden’s goal to “prioritize both environmental justice and the creation of well-paying union jobs.”

The rule blathers on about the vague benefits of unionization. But the authors produce zero evidence that unions improve returns for investors.

Only 6% of the U.S. private sector workforce is unionized. Biden is determined to increase that by making the $6.8 trillion held by 401(k) plans more available to union companies than nonunion ones.

The second worrisome change is that Biden makes ESG funds eligible to be the “default” fund when a worker doesn’t choose a fund. The Trump administration banned that. Biden’s rule will push more workers unwittingly into these funds.

Biden’s doing an end run around democracy, trying to change corporate America without having to pass laws in Congress. Companies need investment capital. The more 401(k) money is controlled by ESG funds, the more pressure can be put on companies to adopt the ESG agenda — climate change, diversity and unionization — whether they like it or not. Biden’s buddies on Wall Street will do the financial arm twisting.

Democrats invented ballot harvesting. Now they’re on to 401(k) harvesting.

Biden’s new rule eventually will be challenged in court, and probably struck down. The Labor Department characterizes it as a mere clarification of the 1974 law enacted by Congress — the Employee Retirement Income Security Act — that requires 401(k) retirement plan sponsors to act “solely in the interest” of savers. In truth, the new rule reverses ERISA. The Labor Department is trying to do what only Congress has the power to do.

In the meantime, employees should avoid getting stuck in an ESG plan unless they’re willing to sacrifice their retirement to advance a left-wing political agenda.

Elon Musk nailed it, tweeting: “ESG is the devil.”

Betsy McCaughey is a former lieutenant governor of New York and chairman of the Committee to Reduce Infection Deaths. Follow her on Twitter @Betsy_McCaughey. To find out more about Betsy McCaughey and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website.

COPYRIGHT 2022 CREATORS.COM


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johnh
1 month ago

Biden has no shame when he is willing to take another end run around Congress to push his Green Deal. Anyone with 401K needs to be aware of this.

tika
1 month ago

“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.” this is possibly THE SINGLE MOST IGNORANT MISINFORMED statement ever published right after “God is dead”. the use of the word “required” and the phrase ” invest the money where it’s expected to get the top return ” are ridiculous. Appropriate to the investor’s risk tolerance and objectives are the requirements. find a real profession manager before you chase ones simply touting “top returns”.

Mot
1 month ago

Demonrats deserve dirt naps. I truly despise them. ????

MariaRose
1 month ago

The 401s described in this article, are usually placed in a money management program by the company not the employee, so unless the employee gets to choose the bank, this ERISA is going to lower the potential earnings over the years. Now if the employee leaves the company and is able to take the 401 account with them, they will then have the decision to monitor the account investment and change how the money is invested. I am not sure if you can do this while working for the company but if you get the quarterly or yearly reports on the account then you do have a say in the investment of the funds in your specific account. I know that I did that by calling the fund program directly with my account number. Don’t let full control be out of your hands.

Bonnie Dalton
1 month ago
Reply to  MariaRose

When I worked for a large corporation I could monitor my investments on a quarterly basis and request changes. Hopefully that is still available to employees but they have to make the effort to look and review.

legally present
1 month ago

Exactly what do us 80 year old do with NO money WE earned and saved like they told us to do IF they take our $$$. WHO gives them the authority to take someone else’s money???

Fingerlakes
1 month ago

Welcome to the Democratic American Communist Party! I didn’t vote for them, but millions of idiots did.

Valerie
1 month ago
Reply to  Fingerlakes

I just don’t understand how anyone could vote for these crooked Democrats. I guess they won’t get it until this country is bankrupt and we are living in a 3rd World Country. When are the Republicans going to wise up and stop fighting amongst themselves because with their in-fighting they are getting the Democrats closer to a Democratic Dictatorship.

Leatha
1 month ago

No one not even Biden He has No powers of any kind

Mot
1 month ago

Government, Democrat government, never, ever, vote Democrat.

johnh
1 month ago

ESG is a blatant end run around Congress & is intended to fund Green Deal of Biden . This 401-K was started around 1980 & I am positive that you can find thousands of people that will verify that this is funding their retirement & why does U S Government want to ruin this 40-years later. This end run around Congress must be stopped…..and I mean by us voters.

Tom
1 month ago
Reply to  johnh

Won’t happen, too many s t u p i d voters, many have likely never saved a dime, and are jealous and covetous of those who did.

Henry D
1 month ago

And how is this in keeping with his slogan of “Building a Better America”? Could not say I was HAPPY spending all of my retirement savings UNTIL NOW.

Carl
1 month ago

This is government interference in the private sector that favors those companies that support Democratic Party policies over the investor.

J Rea
1 month ago

I moved my retirement to Ave Maria Funds. At least they invest consistent with my religious beliefs. And if the economy continues its Biden downward projectory at least I have a prayer.

J. Farley
1 month ago

We have watched an empowerment of a criminal enterprise, and America is a failing nation because the Democrats, the RINO’s, and the News Media are striving for an American down fall.

Mim
1 month ago
Reply to  J. Farley

They keep on electing these people McConnell needs to removed from speaker. But GOP elected him . McConnell gave the PAC money he controls to a Rino in Ak she back stabbed on a bill when opposed it but got elected changed her vote support of bill with the other 12 RINOs
.

The Old Crab
1 month ago

The article states “employees should avoid getting stuck in an ESG plan”, but never says how. What choices do employees have when their company has their 401Ks with, say, Vanguard?

Kelly S
1 month ago
Reply to  The Old Crab

Great point/question. I am in exactly that boat.

PaulE
1 month ago
Reply to  The Old Crab

Sit down with your 401-K plan administrator and specifically state you DO NOT want any of your current or future funds invested in ANY Vanguard fund that uses ESG as a determiner of investment strategy. It’s your money and YOU control how it is invested, NOT Vanguard. If the plan administrator tells you that NO SUCH OPTION exists, then you need to sit down with an HR rep at your company and file a complaint concerning Vanguard and the lack of options. Encourage as many of your fellow employees to do the exact same thing. Making noise and raising the issue is how you force your company to consider an alternative 401-K fund manager. Remember at the end of the day, this is YOUR retirement money you’re talking about. How much are you willing to lose by having it tied up in underperforming ESG type funds?

johnh
1 month ago
Reply to  The Old Crab

Do not know about your plan, but most companies that have Vanguard give you several fund options that you can put funds into. If nothing else, talk to your Accounting or HR dept about your 401K plan.

Letts Brandon
1 month ago

Good article but it’s short on content that is always kept hidden from the American public. This is all backed and promoted by the major financial institutions who’s leaders are CFR and/or WEF members. The most well known, Larry Fink at Blackrock.

David fink
1 month ago

Thank you for the warning.

Dan W.
1 month ago

A 401(k) is never a vehicle for making political statements. It’s sole purpose is to maximize returns and minimize expenses.

I never trusted the company sponsored fund managers offered by the custodian of my employer’s 401(k) plan to make any financial decisions for me. I never used those fund managers or allowed “default” decisions to be made for me.

PaulE
1 month ago
Reply to  Dan W.

Completely agree on the first paragraph. That used to the case up until now. In the comparative studies I’ve seen over the last 3 years from various fund managers, ESG based investing generally returns 1 to 1.5 percentage points less per annum than funds focused solely on maximizing returns to the individual, while also entailing higher expenses. Over a typical 20, 30 and 40 year investment period, that would cost the individual 401-K investor 10s of thousands of dollars via those lower returns. I myself have modeled a typical ESG-type portfolio from looking at what these ESG funds contain and run a regression analysis over time to plot the projected returns. The numbers are consistently subpar to what a typical conventional investment portfolio will generate over the same time frame.

I would also agree that most people should never opt for the “default” selection offered by most fund managers. Those default options typically contain the most costly management fees and deliver mediocre returns. People should take the time to carefully review the various options and remember that for many of them, the money those 401-Ks generate will likely compromise the bulk of the total retirement funds. So invest to achieve your best returns.

David Millikan
1 month ago

PRESIDENT TRUMP GOT EVERYONE’S 401(k)’s BUILT UP
and
DICTATOR Beijing biden DESTROYS
401(k)’s ON PURPOSE JUST LIKE HE’S DESTROYING OUR COUNTRY
ON PURPOSE.

johnh
1 month ago
Reply to  David Millikan

Trump did not build up 401ks, these plans were approved by US Govt around 1980 (POTUS) & anyone in plan for last 40-years can tell you there are ups & downs in plan, but a person can have a lot of money if they keep cost averaging for that many years.

Nick Patriot
1 month ago
Reply to  johnh

Have another glass of commie kool-aid, comrade. Our 401K went up under Trump and are going DOWN under obiden. We don’t care what a commie troll like you has to say.

Gilbert Glaser
1 month ago

With Federal Reserve n the Elites buying up the sold stocks, to make the sh*tting President look good, as they done with Obama…
Your 401K plan will be worthless anyways…
They run the show, when they get where they want, they can sell any amount or all to crash the Market anytime they wish…
Don’t think for one moment they won’t…
IT’S THE PLAN…
GOING OUT IN A BANG…
HURTING MILLIONS !!!

Laura
1 month ago

What happened to Fiduciary responsibility? Just more lawlessness by this administration. When the Republicans take over Congress in January, hopefully this latest over-reach will be stopped in it’s tracks.

PaulE
1 month ago
Reply to  Laura

To answer your question, Democrats generally view social justice concerns as being more important than fiduciary responsibility or any other legitimate financial concerns related to how your money is managed on your behalf. In the meantime, the whole process is going to be challenged in the courts as the article states, but that will take time. Months or years, depending on the glacial speed of our judicial system. In the meantime, people with 401-K’s should act on January 2nd to ensure they have notified their company retirement custodians, that are managing the retirement funds for their place of employment, to NOT put any new contributions or current balances into any sort of ESG type fund.

As for reversing this particular illegal change to existing law via Congress, Republicans will only control the House. The Senate will likely be Democrat controlled. So no avenue ,via getting legislation passed in the House, would ever be approved in the Senate. Also Joe Biden would simply veto any such legislation that would come across his desk concerning stopping his own ESG initiative. Sorry but the Republicans in the House are pretty much limited to just holding endless hearings for the next 2 years. No constructive legislation to reverse any of the damage the Biden administration or the Democrats have inflicted on the country over the past 2 years.

Max
1 month ago
Reply to  PaulE

Your second paragraph is on the money as usual.

PaulE
1 month ago
Reply to  Max

I’m just trying to present the reality of what is and is not possible with the make-up of Congress. I see Warnock won in Georgia as expected. So now the Democrats can unilaterally kill the filibuster and load up all the Senate committees with a majority of Democrats to get anything they want. Expect to see Team Biden submitting boat loads of names for nomination to the federal courts starting in 2023. All will be approved, no matter how insanely radical they are. The Senate Dems are going to pack every federal and appellate federal bench with as many progressive Judges as they can.

Dan W.
1 month ago
Reply to  PaulE

On the other hand, the horse is already out of the barn on both of these issues.

While the wheels are greased for court nominations, this is common when one party has both the WH and Senate and we already have nailed down a strong majority on the Supreme Court.

As for doing away with the filibuster, since we took back the House, no viable legislation is going to come out of either chamber during the next two years. There isn’t much incentive to end the filibuster in the Senate with no key legislative votes on the horizon.

PaulE
1 month ago
Reply to  Dan W.

Democrats are ALWAYS forward looking. I wish I could say the same thing about GOP leadership in Congress, but look who is in charge in both chambers of Congress. Democrats plan for when the American people enable the Democrats to control both chambers of Congress again. Like in 2024, if all the Republicans have to show for their House majority after 2 years of non-stop hearings is essentially nothing. Don’t think that isn’t already being formulated as one of chief messages of the 2024 campaign season.

I think we can both agree that no one in the DOJ or the FBI is going to do anything with any criminal referral sent by the GOP controlled House to either Executive entity. Just by looking at the recent history over the last dozen years. That no one will be held accountable for anything. Then suddenly the lack of a filibuster will be very, very important to Democrats. Once back in charge of both chambers, they will be able to just ram through one piece of legislation after another on pure party majorities.

Dan W.
1 month ago
Reply to  PaulE

I agree that DOJ is not going to do anything with any criminal referral sent by the GOP controlled House.

I also predict that DOJ is not going to do anything with any criminal referral sent by the current Dem controlled House regarding the January 6th hearings. Stay tuned.

AL Koppen
1 month ago
Reply to  Dan W.

I thought that they’d have to overcome the filibuster in order to be able to vote to eliminate it?

Dan W.
1 month ago
Reply to  AL Koppen

Argh, you made me do research.

From the Brookings website: There are a couple of ways of changing the filibuster.

One, the simple (but less likely of success) way is to change Senate Rule 22 (a/k/a the cloture rule) but ending debate on a standing Senate rule requires acceptance of 2/3 of the members present and voting.

To your point, this method is unlikely to succeed because you have to overcome a filibuster to end the filibuster rule.

Two, a more complicated, but more likely, way to ban the filibuster would be to create a new Senate precedent. The chamber’s precedents exist alongside its formal rules to provide additional insight into how and when its rules have been applied in particular ways. Importantly, this approach to curtailing the filibuster—colloquially known as the “nuclear option” and more formally as “reform by ruling”—can, in certain circumstances, be employed with support from only a simple majority of senators.

The nuclear option leverages the fact that a new precedent can be created by a senator raising a point of order, or claiming that a Senate rule is being violated. If the presiding officer (typically a member of the Senate) agrees, that ruling establishes a new precedent. If the presiding officer disagrees, another senator can appeal the ruling of the chair. If a majority of the Senate votes to reverse the decision of the chair, then the opposite of the chair’s ruling becomes the new precedent.

In both 2013 and 2017, the Senate used this approach to reduce the number of votes needed to end debate on nominations. The majority leader used two non-debatable motions to bring up the relevant nominations, and then raised a point of order that the vote on cloture is by majority vote.

The presiding officer ruled against the point of order, but his ruling was overturned on appeal—which, again, required only a majority in support. In sum, by following the right steps in a particular parliamentary circumstance, a simple majority of senators can establish a new interpretation of a Senate rule.

PaulE
1 month ago
Reply to  Dan W.

What you have stated is all correct. The nuclear option is what the Democrats would use to revise precedent to eliminate the filibuster, as it is the most expedient means available to them.

Max
1 month ago
Reply to  PaulE

Sadly, I agree with you.

johnh
1 month ago
Reply to  Laura

Republicans will control House , but Democrats will control Senate 51 to 49.

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