Wyoming Joins 24 Other States in Lawsuit Regarding Retirement Funds
Governor Mark Gordon announced on Thursday that Wyoming has joined 24 other states in a lawsuit over a rule from the Department of Labor that would impact the retirement accounts of countless Wyoming residents.
That's according to a press release from Governor Gordon's office, which wrote that "The rule would allow 401(k) managers to direct their clients’ money to ESG (Environmental Social Governance) investments rather than fiduciary standards. This is contrary to the laws outlined in the Employee Retirement Income Security Act of 1974 (ERISA)."
This rule, entitled 'Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights' takes effect on January 30, 2023. According to the release, the rule affects 2/3 of America's retirement savings accounts, totaling $12 trillion in assets.
The complaint filed states that “[T]he 2022 Investment Duties Rule makes changes that authorize fiduciaries to consider and promote 'nonpecuniary benefits' when making investment decisions. Contrary to Congress’s clear intent, these changes make it easier for fiduciaries to act with mixed motives. They also make it harder for beneficiaries to police such conduct."
According to the release, this new rule runs counter to the strict laws that were placed in ERISA; laws that were put into place in order to protect retirement savings accounts from unnecessary risk.
“This rule is contrary to longstanding federal law and fiduciary principles that require fiduciaries to place their clients’ financial interests first,” Governor Mark Gordon said. “Allowing political agendas to guide managers investing Americans’ retirement accounts is unacceptable and short sighted. Their sole responsibility must be the best financial interests of the beneficiaries.
"Attorney General Hill looks for appropriate times to involve Wyoming in legal matters, and I appreciate that this legal action is one vehicle to challenge this concerning trend and protect Wyoming's interests and make our voice heard.”
Wyoming joins 24 other states in this lawsuit, including: "Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, Tennessee, Texas, Virginia, and West Virginia."
The full version of the complaint can be seen here: