OPINION:
Americans’ golden years are becoming tarnished: 78% aren’t saving enough for retirement, and more than half won’t be able to pay the bills. The solution seems easy in theory, if not in practice: Like the fabled ant and grasshopper facing winter, American workers are advised to squirrel away more in their 401(k) accounts now.
But what if lagging contributions weren’t causing the problems? What if, instead, it was the funds in your 401(k) using your money to make it harder for you to retire?
Unfortunately, that’s exactly what’s happening. Rather than focus on maximizing profits, America’s largest asset managers are using the money invested in their funds — including your retirement savings — to pursue environmental, social and governance goals instead.
Here’s how we got here, and what you need to do to protect your nest egg.
As CEO of Strive Asset Management — where we focus on shareholder value first and foremost — I know this world all too well. For years, America’s largest retirement fund managers have been using their insider position as a large shareholder in companies to push those companies to go green, use paper straws, and invest in soy burgers instead of maximizing your returns.
The most popular asset managers in retirement plans, including BlackRock, State Street and Fidelity, have made net-zero pledges, promising not only that they themselves will slash their emissions to zero by 2050, but that they’ll also force every company they’re invested in to follow suit. To do so, they’ve pushed these companies to undertake all kinds of initiatives to do things like fight climate change, with potentially disastrous consequences for the average American consumer.
Whether it’s forcing farmers to use green fertilizer that would drive up food prices by up to 26% or pressuring airlines to use sustainable jet fuel that’s eight times as expensive, these “environmentally responsible” policies often involve severe trade-offs that would-be retirees have no say in.
Employers are in an awkward spot, too. Many retirement fund managers are wielding 401(k) money to promote agendas that harm not just retirees, but employers themselves. Imagine an airline that funds a pension for its employees, only to learn that its pension manager is pressuring the airline industry to adopt costly net-zero policies that will harm the business. Or a dairy farmer that offers a 401(k) to his employees, only to find out that the fund manager is pressuring supermarkets to avoid buying milk from his farm because of animal welfare concerns.
Study after study shows that companies’ performance suffers when they’re forced to bend the knee to activists instead of focusing on business. Investors suffer too. The nurse who dreamed of retiring at 62 is now forced to take on extra shifts until age 70, just so wealthy CEOs can toast themselves at Davos.
Fortunately, pro-American capitalists are fighting back. Strive provides 401(k) offerings focused on maximizing shareholder profits — and even if you don’t get this kind of investment protection from Strive, you absolutely should be getting it from somewhere. American workers and retirees need to start actively guarding their retirement savings from these predatory activists now — before retirement is out of reach.
• Matt Cole is chief executive officer and chief investment officer for Strive Asset Management, an Ohio-based firm whose mission is to maximize shareholder value by leading companies to focus on excellence.
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