A group of 25 states filed a federal lawsuit against the Biden administration on Thursday, claiming that a recent rule allowing retirement plan managers to take social and environmental concerns into account when making investment decisions was illegal.
A Department of Labor (DOL) rule that was revealed in November and is scheduled to take effect on January 30 is being challenged in court by 24 states, including Louisiana, Texas, and Virginia. The case is being led by Utah Attorney General Sean Reyes.
The states contended that the regulation would allow fiduciaries to seriously hurt the financial interests of customers by allowing them to include so-called environment, social, and governance (ESG) issues into Americans’ retirement funds.
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Reyes said, “The Biden administration is promoting its climate change agenda by putting everyday people’s retirement money at risk,” adding that “Americans are already suffering from the current economic downturn.”
The two dozen states contested the regulation in a federal district court in Texas and requested a preliminary injunction to stop the DOL from enforcing it until the matter was resolved.
The Employee Retirement Income Security Act (ERISA) of 1974 is allegedly breached by the DOL, according to the lawsuit filed by the states. The law protects assets worth about $12 trillion and the retirement income of 152 million American workers, or more than two-thirds of the adult population of the country.
Story was adapted from Fox Business.
