Is the job of a retirement fund investor to help you maximize your investments to fund your retirement, or to make “socially responsible” investments with your savings?

Until the Biden administration changed the rule, federal law required the former. This week, Sen. Bob Casey and most of his fellow Pennsylvania Democrats cast their votes for the latter.

At issue is a rule change Biden’s Department of Labor slipped through over Thanksgiving week last year ending the federal mandate that retirement plan sponsors make investment decisions based on fiduciary concerns — maximizing the wealth of retirees. Under the 1974 Employee Retirement Income Security Act (Erisa), managers handling approximately $12 trillion on behalf of 150 million Americans, were instructed to make decisions “solely in the interest” of participants and beneficiaries.

Not anymore. Biden’s rule allows them to invest based on environmental, social and governance (ESG) factors.

Supporters of so-called ‘woke’ investing say keeping retirement funds away from investments in fossil fuels, military contractors, gun manufacturers, etc. can be a winning investment strategy. Opponents, like Pennsylvania Treasurer Stacy Garrity, says Pennsylvania state law

“ESG has been used as a way of adding social objectives when making investment decisions,” Garrity told DVJournal in a recent podcast. “I oversee about $46 billion, and Pennsylvania state law requires me to use the ‘prudent investment standard.’ The only goal I have is to protect the interests of the taxpayers. Those who support ESG tend to care less about returns and more about policy goals. I have to protect taxpayers’ money.”

Most Pennsylvania Democrats in the federal delegation don’t agree with Garrity’s approach.

On Tuesday, a bipartisan majority in the House passed a resolution opposing the rule change, 216-204. Both Reps. Madeleine Dean (Montgomery) and Mary Gay Scanlon (Delaware) were part of the all-Democrat minority. Rep. Chrissy Houlahan (D-Chester) joined Bucks County Republican Rep. Brian Fitzpatrick in the bipartisan majority.

On Wednesday, the resolution came before the U.S. Senate. Once again there was a bipartisan vote (50-46) rejecting the rule change. But Sen Bob Casey (D-Pa.) stuck with the partisan minority. (Sen. John Fetterman is being treated for depression and was not on hand to cast a vote.)

President Biden is expected to veto the resolution, leaving retirement fund managers free to use their political views as part of their portfolio management. And, of course, individual investors have always been free to put their own retirement savings in any investment they choose.

“This [resolution] simply says that the primary criterion has to be the financial return on investment,” said Sen. Mike Braun (R-Ind.) who sponsored the bill.

Democrat Sen. Jon Tester (D-Mont.) said he voted against the new Biden administration rule because it “undermines retirement accounts for working Montanans and is wrong for my state.”.

Last year, Florida Gov. Ron DeSantis (R) proposed barring state pension funds from considering ESG factors when investing government money. “ESG provides a pretext for CEOs to use shareholder assets to target issues like reducing the use of fossil fuels and restricting Second Amendment rights,” DeSantis writes in his new book.

“The Administration is politicizing retirement savings and putting taxpayers and workers on the hook for the costs. No wonder it released the rule right before Thanksgiving,” The Wall Street Journal editorialized.

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