Wyoming joins 25-state suit over retirement savings rule

Wyoming has joined a 25-state lawsuit against the U.S. Department of Labor over a new rule that will allow 401(k) managers to direct people's retirement savings into environmental and social investments, Gov. Mark Gordon announced.

The 2022 Investment Duties Rule makes changes that authorize fiduciaries to consider and promote "nonpecuniary benefits," or benefits not consisting of money, when making investment decisions; addressing climate change could be considered a benefit although it could cost a person financial gain.

The rule is set to take effect on Jan. 30.

"Allowing political agendas to guide managers investing Americans' retirement accounts is unacceptable and short sighted," Gordon said in a statement Thursday. "Their sole responsibility must be the best financial interests of the beneficiaries."

A "stated desire to address climate change" by the Biden Administration may put retirement savings up against unnecessary risk, Gordon said.

The states involved in the lawsuit contend the rule is contrary to longstanding laws outlined in the Employee Retirement Income Security Act of 1974. The federal law ensures fiduciaries do not misuse workers' retirement savings.

About two-thirds of adult populations will be affected. There are 152 million workers with retirement savings totaling $12 trillion in assets.

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, West Virginia, and now Wyoming, are all part of the lawsuit.