Indiana Politicians Choosing to Inject Politics over Retirement and Pensions

Indiana politicians have placed the first company on the state’s watchlist, BlackRock, tied to concerns over environmental, social or governance (ESG) commitments the company is alleged to have made.  And while the state Treasurer’s office has indicated there will likely be others, stating they were looking into “every company that’s eligible”,  being on the Indiana state Treasurer’s watchlist potentially prohibits a financial institution like BlackRock from doing business with the state’s public retirement system.

There seems to be no good reason politics need to be inserted into the state’s retirement programs. 

When the initial legislation for this process was first proposed, Indiana’s Legislative Services Agency Office of Fiscal Management and Analysis told lawmakers it “…could result in reduced aggregated investment returns for the system’s defined benefit and defined contribution funds managed by INPRS by a total of $6.7 billion over the next 10 years, with the DB plan down by $6.4 billion and $300 million for the defined contribution plan.”

The state’s elected and appointed officials are supposed to prioritize constituents needs – securing the retirements of the first responders, teachers, and other public employees in public pension systems. But instead, they’re putting politics first.

Indiana Treasurer Daniel Elliott released a report which announced BlackRock,  an asset manager and investment advisor, was found to be “engaged in an ESG commitment,” suggesting the firm should be blocked from advising the Indiana Public Retirement System (INPRS).

“We shouldn’t accept actions that put Hoosier retirees at risk,” Elliot said in a news release.

He’s right, but through this action he’s one of the people putting those retirees at risk. He’s following a law approved by Indiana lawmakers in 2023, and the INPRS board has indicated it will review the watchlist to decide who ultimately should be banned from doing business with the pension fund. The law gives them six months to decide what actions to take.

In other states, that’s been an expensive proposition for current and future retirees and for taxpayers as well.

The decision-makers in Indiana state government can’t say they don’t know what’s going to happen. These politically driven boycotts are unquestionably expensive. Those state leaders are ignoring the costs, failing the same citizens they’ll later be asking for votes and political support.

What in the world are they thinking?