Nothing is sacred when it comes to a culture war.
Forget about capitalism and free market principles, backing the blue, supporting firefighters, or “loving teachers.” When the culture warriors are triggered by their national masters nothing is sacred. This includes the hard-earned pensions of the noble public servants listed above.
Today was the start of a three-day set of hearings, no two-day, wait…we’re not sure! What we know is that the effort to use KPERS as a political football has become an exercise in wrestling with bills that would “cancel” companies, for the purpose of contracts and investing, that are engaged in Environmental, Social, and Governmental business practices. Also known as ESG.
The three bills in question are SB 224, SB 291, and HB 2436. Of the three, SB 224 is the most egregious. 224 would literally require the State Treasurer to create and keep a “blacklist” of financial companies that are involved in “ideological boycotts.”
Such a boycott could be defined as a financial investment company limiting business with another company that may be in the business of fossil fuels, manufacture of firearms, etc.…
In short, if a financial company chooses to invest in a wind turbine company instead of a coal mine it could be blacklisted. If said company is part of your KPERS portfolio, KPERS will warn them, give them 90 days to end their efforts to make the world better, and if the company chooses to follow its ethical compass, then KPERS could be forced to divest from the company 100% within 365 days.
The impact this would have on the KPERS trust fund would be devastating. Calculated benefits in Tiers 1 and 2 may be sheltered a bit because of the defined benefit nature of the plan but members of Tier 3 could see their cash balance impacted tremendously. All three Tiers would be in danger of a crash.
SB 291 and HB 2436 are not nearly as radical. Both bills are good faith attempts to make everyone happy and create no harm. Unfortunately, this is the recipe for unintended consequences. Entertaining this madness to begin with- while we haven’t even come close to reforming the tremendously inadequate Tier 3- is an insult to those who have earned their KPERS portfolio.
SB 291 will have day two of its hearings tomorrow and HB 2436 will start hearings tomorrow. We will testify in opposition in both committees.