Editorial: Secretary Chao Should Block the Union Raid on Pension Funds
Earlier today, Americans for Limited Government announced that it had formally asked Labor Secretary Elaine Chao to launch an immediate investigation into a well-orchestrated plan by top union officials, environmentalists, and political interest groups to raid worker pension funds in order to push the green agenda.
Should the Secretary find that the coalition, which calls itself the “Investor Network on Climate Risk” (INCR), is, indeed, undertaking such a raid, as it has already announced, it would appear to be a clear violation of the government's strict fiduciary standards under the Employee Retirement Income Security Act (ERISA). And should the INCR plan be fully implemented, it would place billions of dollars of worker retirement funds at an unprecedented and unacceptable risk.
In a letter hand-delivered to Secretary Chao one week ago, ALG president Bill Wilson warned, “Union officials are putting the retirement security at grave risk to pursue a dubious political agenda. This is more than irresponsible, it may in fact be a crime in violation of ERISA.”
ERISA explicitly limits the investment of worker pension funds to the “exclusive purpose of providing benefits to participants and their beneficiaries; defraying reasonable expenses of administering the plan.” Dating back to December of 2007, the Department of Labor has repeatedly informed union officials that it rejects “a construction of ERISA which would rend the Act's tight limits on the use of plan assets illusory, and which would permit plan fiduciaries to tap into ERISA trusts to promote myriad public policy preferences ….”
The urgent issue at hand for workers vested in union and other pension funds is not whether the global warming issue is legitimate as its apologists claim, or a global charade as its detractors contend. It is whether union officials and other INCR coalition members have a right to put worker pensions at risk in order to further the global warming political agenda. Or, whether, under ERISA, workers have a right to demand that their pensions be placed only in conventional accounts offering a real, clear, and present return on investment.
Wilson says that workers' rights must come first, warning that the INCR pension raid “amounts to an elaborate shell game to reduce carbon emissions by endangering retirements. All of which has nothing to do with protecting the savings of investors from risk to their portfolios.”
We believe the ERISA law is on the workers' side. And Secretary Chao should act immediately to block INCR efforts to subvert it regardless of how noble its members declare their intentions to be.