LANSING, Mich. — State Sen. Jim Runestad this week introduced legislation to protect Michigan’s public pensions from politically motivated investing strategies.
“Thousands of Michiganders rely on their public pension for security in retirement. They’ve entrusted the state to manage those investments, and it ought to be criminal for liberal pension boards to prioritize woke politics over fiscal prudence and investment returns,” said Runestad, R-White Lake.
“These bad actors are putting hardworking people’s comfortable retirement beneath their own desire to advance liberal ideologies. They try to justify their agenda by calling it ‘ESG’ investing for the environmental, social and governance nonsense that it represents, but I call it what it really is: ‘financial DEI.’”
Runestad said Senate Bill 300 would amend the Public Employee Retirement System Investment Act to require that only pecuniary factors be considered when evaluating investments. It would ban pension investment strategies based on noneconomic, nonfinancial, social, political or ideological objectives. The legislation mirrors Runestad’s SB 1192 of 2022, which gained support from the Senate Finance Committee.
“There’s been a sad trend of progressive activism taking hold in corporate boardrooms and public institutions across the country. But public boards have a duty to protect funds promised to retirees. They shouldn’t be gambling with public money on the always-spinning roulette wheel of dizzying wokeism,” Runestad said.
“It’s time to stop playing politics and start keeping promises when it comes to public pensions. My bill will protect these funds from bad board actors and their terrible, politically motivated ideas.”
Runestad’s bill has already gained support from public policy leaders who say responsible financial management of these accounts will provide the best benefit for the state and its retirees.
“Michigan’s pension managers should be focused on investment returns and not playing political games with retirement funds, especially since the state already has more than $30 billion in pension debt,” said James Hohman, director of fiscal policy at the Mackinac Center for Public Policy. “So-called ESG investment strategies are unnecessary distractions from the purpose of public pension systems and can mean lower returns.”
Zachary Christensen, managing director for the Pension Integrity Project at Reason Foundation, said, “Public pension systems should keep politics of all kinds out of their investments to serve their core duty of maximizing investment returns to provide workers with the retirement benefits they’ve been promised while minimizing financial risks for taxpayers. The modern guardrails and reporting standards in this bill can significantly strengthen these vital systems.”
Heartland Impact Executive Director Cameron Sholty said, “Ultimately, ESG-driven financial discrimination imposes political orthodoxy at the expense of sound risk assessment, consumer choice and economic vitality. The commonsense provisions in SB 300 would go far in protecting the Michigan economy and Michigan companies from discrimination and denial of basic financial services.”
American Energy Institute CEO Jason Isaac, who has testified before Congress on ESG-related research, said such strategies undermine returns and betray the trust of retirees by prioritizing political ideology over sound financial stewardship.
“This bill rightly restores fiduciary duty to its original, lawful purpose: maximizing pecuniary benefit for beneficiaries,” Isaac said. “Michigan’s retirees deserve protection from the woke financial activism that is threatening the integrity of pension systems across the country. The American Energy Institute commends Sen. Runestad for introducing legislation that restores financial integrity to Michigan’s public pension systems.”
Jack Baum, with Americans for Tax Reform, added, “This legislation would go a long way in helping to protect the investments of Michigan taxpayers. We are grateful for Sen. Runestad’s steadfast commitment to opposing tax increases and fighting to defend the rights of hardworking taxpayers everywhere.”