Attorney General Bailey Files Suit Over Labor Department’s New ESG Rule
JEFFERSON CITY, Mo. - In an effort to enforce the laws as written, Missouri Attorney General Andrew Bailey and 24 other state attorneys general filed suit over a Department of Labor rule that would allow 401(k) managers to direct their clients’ money to ESG (Environmental Social Governance) investments. The rule and runs contrary to the laws outlined in the Employee Retirement Income Security Act of 1974 (ERISA), and would harm the retirement accounts of millions of people at a time when inflation has already stressed the finances of so many.
“As Attorney General, I will enforce the law as written, which includes holding the Biden Administration accountable for blatantly violating rules set forth by Congress,” said Attorney General Bailey. “My Office will do everything in its power to ensure that Missourians’ hard-earned savings are not diverted by the Biden administration to fund a radical environment ideology.”
The new rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” will take effect on January 30, 2023. Two-thirds of the U.S. population’s retirement savings accounts would be affected, totaling $12 trillion in assets. Strict laws placed in ERISA are intended to protect retirement savings from unnecessary risk.
The lawsuit asserts that “[T]he 2022 Investment Duties Rule makes changes that authorize fiduciaries to consider and promote “nonpecuniary benefits” when making investment decisions. … Contrary to Congress’s clear intent, these changes make it easier for fiduciaries to act with mixed motives. They also make it harder for beneficiaries to police such conduct. ”
The 24 states joining Attorney General Bailey in this lawsuit are: Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.
Read a copy of the complaint here: https://ago.mo.gov/docs/default-source/press-releases/esg-labor-lawsuit.pdf?sfvrsn=23bb4990_2
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