Securing retirement savings and investments for firefighters is more important than politics. It’s a critical issue we’ve entrusted to lawmakers and regulators, expecting them to focus on the sober concerns of policy and finance — and not to entangle themselves in politically driven culture wars — especially in an election year.
This issue is important to me. During my 30 years of service as a firefighter, our kitchen table conversations at the station often touched on family and the future — and the importance of a safe and secure retirement.
Many of us will not receive Social Security benefits, increasing the importance of a sound pension fund. As an extension of the values I held as a firefighter in Phoenix, I am committed to supporting my family of firefighters by speaking out against any actions by politicians that put retirement and pension funds at risk.
Retirees and people saving for retirement want to be sure the money they’ll need in the future is growing for them. They need certainty that it’s safe, and that the people they have entrusted have the proper focus on improving and strengthening their retirement opportunities.
Obstacles to investing
Unfortunately, our elected officials and policymakers have been distracted by perceived threats and fears that investment professionals are veering from their fiduciary duty. In response, many have created obstacles to investment opportunities.
As an example, some states are passing laws directing government funds to boycott all investment professionals whose portfolios include any “ESG” investments — where environmental, social, and corporate governance concerns are considered when investing on behalf of certain pension funds. But many of those same firms also have substantial investments in energy and other industries that aren’t related to ESG — not to mention a fiduciary responsibility to prioritize returns for their clients.
These decisions are made without regard for the unintended fiscal consequences these boycott laws and others will have — drastically limiting returns for firefighters, police, nurses, teachers, other public employees, and investors dependent on these pension funds, while increasing costs to taxpayers.
Those decisions are not based on financial performance or the best interest of pensioners and those investing for retirement. They’re based on political ambition and culture war politics.
These aggressive actions against investment professionals and the funds they manage hurts you, me, and all other investors. The price will be paid by taxpayers and public servants in the form of limited returns, higher costs, curbed freedom, and unnecessary polarization.
In a recent letter to the editor about the personal impact of these politically driven actions, a firefighter in Franklin County, MO, wrote, “…the growing politicization of pension funds by states across the country have for the first time in my career made me worry about whether or not my pension will be able to support my family when I eventually do retire. By forcing changes to my pension in the name of politics instead of increasing returns shows that our elected officials do not care about our wellbeing.”
Limiting choices in investments leads to less competition, higher prices, and lower returns. Regulating which financial institutions are allowed to do business in the state — like we saw in Texas and are now seeing in other states — directly correlates to decreased funds. A perfect, real-life example? The town of Stillwater, OK, announced last year they were suspending a capital improvement project because its lender — Bank of America — was barred from practicing in the state after it was placed on a list of funds allegedly boycotting energy companies.
In Texas, a study by the Texas Association of Business estimates that legislative actions creating blacklist will have an economic cost to the state at $668.7 million; that it will cost 3,034 full-time permanent jobs and $37.1 million in local tax revenue.
Another study done by the University of Pennsylvania and Federal Reserve Bank of Chicago found Texas faces hundreds of millions of dollars in additional interest as a result of its recent firearms and fossil fuel boycott legislation, in addition to running up the cost of borrowing moving forward. This means less retirement money for our vital public servants and community officials.
Continued attacks from lawmakers, like the recent Congressional subpoena of several large investment firms, and regulators could devastate the public pensions so many Americans depend on. We owe our public servants the proper retirement benefits they were promised. It’s time to stop interfering with investment professionals and focus on bipartisan policy solutions that will secure the best retirements for American workers.
From talking around the tailboard to representing the needs of firefighters, I am committed to service and to the people who served with me. That is why I am honored to serve as the president of the Alliance for Prosperity and a Secure Retirement (APSR). This newly formed coalition of retirees, savers, and investors will focus on maximizing returns, increasing investment choices, and supporting public policies that improve and strengthen retirement opportunities for Americans.
We cannot let politics jeopardize the financial security of current and future retirees.
