“This green-union pension raid will not only endanger
workers’ retirement benefits, but the greater economy.”
—ALG President Bill Wilson.
ALG Urges Labor Secretary Chao to Halt Planned
Union/Greens Raid On Worker Pension Funds
January 5, 2009, Fairfax, VA—Americans for Limited Government President Bill Wilson has called upon Labor Secretary Elaine Chao to launch an immediate investigation into plans by a coalition of union officials and environmentalists to raid employee pension funds in order “to pursue a dubious political agenda.”
Wilson’s call came in a letter to the Secretary hand delivered on Tuesday, December 30th. In the letter, the ALG executive warned that the announced union/environmentalist action directly violates Employment Retirement Income Security Act (ERISA) provisions by draining working pension funds to wage a political war on global warming. The letter specifically cites the Investor Network on Climate Risk (INCR) as culpable in what he terms an “elaborate shell game.”
The INCR’s global warming Action Plan has 49 signers, including leaders of pension funds, union officials, state treasurers, state and city comptrollers, financial service firms, asset managers, and foundations. Included among the signatories are Andrew Stern, President of Service Employees International Union, and Bruce Raynor, President of UNITE HERE, together representing over 2 million workers and retirees nationwide.
“Union officials are putting the retirement security of workers 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,” said Wilson.
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 ....”
Wilson’s letter to Secretary Chao calls upon the Department of Labor to ensure that the union/environmentalist coalition properly acts in the best interests of participants and beneficiaries under the plan. It states, “We urge you to take the actions necessary to ensure the fiduciaries within your jurisdiction are complying with ERISA... and are investing solely for the benefit of the participants and beneficiaries of their plans.”
Wilson noted that that the success of the investment strategy, by its own admission, is actually necessarily tied to restrictions in carbon emissions that the federal and state governments have yet to enact, thus posing greater uncertainty and risk to investors.
“The INCR with its Big Labor and state participants create the very financial risks to investors its own action plan portends to reduce,” said Wilson in a statement. “In the process, it is putting the retirement savings and investments of thousands of investors, workers, and retirees in jeopardy by tying financial returns to projected government actions that have not yet taken place, and to a disputed science that may not be factual.”
The union/environmentalist plan ostensibly seeks to “reduce climate risks” in investor portfolios by requiring investments to consider climate risk, investing capital in “developing and deploying clean technologies”, reducing by 20 percent energy use in real estate portfolios, and to support policy actions to enact a “mandatory national policy to contain and reduce national greenhouse gas emissions economy-wide, making sizable, sensible, long-term cuts in accordance with the 60-90% reductions below 1990 levels by 2050 that scientists and climate models suggest are urgently needed to avoid the worst and most costly impacts from climate change.”
Wilson contends that “reducing climate risk” is not the real intention of the investment plan, nor should it be allowed even if it were. “This amounts to an elaborate shell game to reduce carbon emissions by endangering retirements,” he said.
“All of which has nothing to do with protecting the savings of investors from risk to their portfolios,” Wilson added.
Wilson warned that left unchecked, “[t]his green-union pension raid will not only endanger workers’ retirement benefits, but the greater economy. The American people have yet to seriously question the cost of going green.”
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Americans for Limited Government is a non- partisan, nationwide network committed to advancing free market reforms,private property rights and core American liberties. For more information on ALG please call us at 703-383-0880 or visit our website at www.GetLiberty.org.