I remember a meeting with my first financial adviser several years ago who told me that the money I had in the Indiana Public Retirement System, or INPRS, needed to be moved out of there. His perspective then was that INPRS did not give me enough control over my own money and that the government’s politics would interfere with my interests eventually, one way or another. In fact, they likely already were.
INPRS now has approximately 500,000 members, whose money the system manages. I continue to be one of them. But the politics of today has put a target on the system and my retirement, for the sole purpose of scoring political points.
Leslie Bonilla Muñiz reported for the Indiana Capital Chronicle on January 26 on two legislative initiatives, Senate Bills 268 and 292 that put this on full display.
To INPRS members like me, it is important to understand that SB 292 is designed to prevent the system from investing in ESG funds. “ESG” funds are those that prioritize environmental, social or corporate governance standards. These are funds on which Republicans across the country have slapped the label of “woke.” If a portfolio features companies that are particularly sensitive to, say, climate change and its impact on profitability or operational standards, that is apparently a bad fund in the eyes of the GOP.
As reported by the New Jersey Monitor last summer, “Nineteen Republican state attorneys general wrote a letter to BlackRock, the world’s largest asset manager, which manages $10 trillion,” accusing “BlackRock of making decisions based on its alleged political agenda rather than the welfare of state pensions.” Indiana Attorney General Todd Rokita was among the signatories.
If ESG investing is a political position, isn’t blocking or banning that investing also taking a political position? Of course, it is.
It is the position of Republicans nationally to ignore climate change, and to oppose social progress and governance standards that consider it. SB 292 is the Indiana version of the national GOP political “platform,” if their grievance strategy can actually be called that.
To Hoosiers, SB 292 would appear to accomplish what the bill author, Sen. Travis Holdman, R-Markle, claims it does. He said the bill wasn’t intended to “tie the hands of the INPRS investors,” but rather ensure that they “do not make decisions based upon environmental and social, or governance standards.” However, there is no way to tell an investor not to use certain criteria in its decision making without it having an impact on the decision itself.
Other pension prohibitions
In the same hearing, the Senate Pensions and Labor Committee considered SB 268, a bill authored by Senator Chris Garten, R-Charlestown, that is designed to divest INPRS from any China-related holdings. Again, Rokita has already staked out this anti-China position through the filing of two lawsuits against China-based TikTok, and other public rhetoric.
What is fascinating about the committee testimony, however, was this nugget from Rokita’s Policy Director and Legislative Counsel, Corrine Youngs in her testimony in support of the bill. In her anti-China rant, she accused the nation of “polluting the minds of our youth.”
And that, in a nutshell, is what this entire endeavor is all about. These bills are a little about money, but entirely about political and even mind control.
In 2023, China is not America’s friend. Will Indiana’s legislature repeal SB 268 if that changes?
There are three statutory investing prohibitions already in place for INPRS. First, it can’t invest in countries the federal government has identified as state sponsors of terrorism. This prohibition makes sense and is nimble enough to change as designations change.
Second, it can’t invest in Sudan due to the genocide in the Darfur region. I assume that one day this prohibition will need to be modified or repealed, as that situation resolves, hopefully.
The third one though, is pure politics. INPRS cannot invest in entities that have boycotted, divested from or sanctioned Israel. Really? So, if a large asset manager, like BlackRock, sees the uncertainty in Israel’s ability to elect a working government several times in a row as a cause to pull investments from the country, INPRS would be prohibited in investing with them? Market volatility comes in many forms and is caused by many things. Even a friend can be a bad bet.
Again, stay out of my business, legislators. You keep proving you are bad at it.
If the legislature really cared about me, as a member of INPRS, it would require the system give me more options on how it invests my money, not fewer.
But my late financial adviser told me the government doesn’t care about me. Now, years after his passing, he continues to be absolutely right.