Concord, NH – Attorney General John M. Formella announces that New Hampshire has joined a 25-state coalition lawsuit over a Department of Labor rule which would affect the retirement accounts of millions of people. The rule would allow 401(k) managers to direct their clients' money to ESG (Environmental Social Governance) investments and runs contrary to the laws outlined in the Employee Retirement Income Security Act of 1974 (ERISA).

"This action is all about protecting the hard-earned retirement savings of Granite Staters and of Americans all across the country. Asset managers should not have an automatic green light to just start directing trillions of U.S. retirement dollars into ESG investments without their clients' directing them to, and that's exactly what they'll get starting next week if we don't stop this," said Attorney General Formella. "Dollars and cents should be driving crucial and potentially risky investment decisions for people, and the policy objectives of an asset manager should not play a role. Federal law has long required fiduciaries to place their clients' financial interests at the forefront, and that is something that should not change."

The new rule, "Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights," will take effect on January 30, 2023. Two-thirds of the U.S. population's retirement savings accounts would be affected, totaling $12 trillion in assets. Strict laws placed in ERISA are intended to protect retirement savings from unnecessary risk.

From the complaint : "[T]he 2022 Investment Duties Rule makes changes that authorize fiduciaries to and promote "nonpecuniary benefits" when making investment decisions. …Contrary to Congress's clear intent, these changes make it easier for fiduciaries to act with mixed motives. They also make it harder for beneficiaries to police such conduct…"