Do you know how your public retirement funds are being invested? [Opinion]
Those Americans who have earned a defined benefit plan should be asking why your pension fund is pouring money into “ESG, or Environmental, Social, Governance” values tied to such things as Climate Change.
Recently the Californian Public Employee Retirement System (CalPERS) Fund proudly informed its members that they are all in for ESG. For those that don’t know, CalPERS is the world’s largest investment fund.
The state, counties, cities, school districts, water districts, and joint powers authorities pay into this fund for each full-time employee they have on staff. This has become the largest cost of delivering services to taxpayers.
When CalPERS investments don’t hit the return of, say 7%, your tax dollars pay that shortfall. CalPERS asks Riverside County and every county in its membership to pay for their investment choices that didn’t produce.
Simultaneously they ask every city in its membership to do the same. That hurts some cities more than others. Coachella, Blythe, and Indio can’t handle that shortfall as well as Palm Desert or Indian Wells. Rancho Mirage is one of the few cities that have 100% of its pension debts paid in full.
CalPERS has a professional investment staff. To be fair, when the investments they made over perform, the members agencies get a break, too. It’s been a longtime since investments over-performed.
We just learned that the Feds seized Silicon Valley Bank (SVB). Taxpayers will end up paying for this bailout. Roku, Lending Club and other major investors will be bailed out by the FDIC.
We won’t know how much ESG investment SVB has until federal investigators tell us. ESG is a proven risk.
A retirement fund and it officers have a fiduciary responsibility or duty to get maximum returns for their members. Not really any different than a stockbroker tries to get the best returns for your retirement and investment funds.
Troubling that more than half of all the ESG funds come from public employees’ pension funds! So, if you are a retired fire fighter, clerical worker, mental health professional, public defender, peace officer, maintenance worker, nurse, emergency medical technician, secretary, planner, grounds worker, judge, or city manager your pension funds that you and your family plan to retire on aren’t always being invested to maximize returns that pay your current or future pensions.
Using public or private pension funds should not be gambled along political or philosophical lines. The funds should be invested in investments that protect and grow those funds. The funds are not the “Monopoly money” of any political party or partisan politician.
The job of a pension fund manager is to make money. The elected members of these pension funds aren’t financial experts. They come from the ranks of their members. They are good people and want to do the best for a return on investment.
With inflation at a 40-year high, a fed that kept interest rates at zero for 12 years, and a federal government that hasn’t seen a new program or benefits it doesn’t like, those with pensions held by the public investment funds should keep a close watch on what investments grow the fund you count on and those that don’t. ESG is a crapshoot retirees and government employers can’t afford.
- Monopoly Money – Retirement Funds: Shutterstock