401K and How Change May be Coming
President Joe Biden and his team released a statement of Tuesday November 22, 2022 that will effectively change the way people can invest their 401k retirement plans. This change was made after former President Donald Trump made his own rule regarding 401k plans that made it easier to invest in the economy and business than most other investment options. Biden's plan, which is set to go into effect in less than 60 days, will make it easier to invest in "impact" or ESG initiatives. Examples of this would be social justice or climate change.
Two articles, one from Fox News and the other from CNBC reported on the news in their own ways.
Fox News is a known right-leaning news source and this article is no different. The title alone shows you the bias that is to follow, "Biden wants your retirement savings to go woke. Here are 3 ways to protect yourself".
The main issue brought up in this article, published on November 29, 2022 by Justin Haskins is how retirement plans will become politized by leftist agendas.
"This will, by design, empower left-wing employers and fund managers to use retirement accounts to push leftist causes." (Haskins, 2022). Haskins implies that this is more of a way to push initiatives that benefit the party more than the retirees. This is said to be a result of ESG funds have proven to be less profitable and overall perform poorly.
Haskins also mentions that there will be no immediate change but over the next couple of years, we will see investment options limit more to leftist investing options as they further push their agendas and plans on those with a 401k.
On the other side of things, CNBC has a more light-hearted attitude towards Biden's plan. CNBC is considered a centered news source for gathering information but has shown slightly leftist bias on many occasions. In comparison to the Fox News article, this one is more informative than opinion based, but still holds a left-leaning perspective throughout the piece.
The rest of the article serves as a guide on how to not get hurt from this plan. The three step process includes telling your employer you are not interesting in investing in ESG, change your default settings in your 401k plan or switch to an IRA instead.
Where Fox News dives into the negatives of this plan and steps to try and avoid it, CNBC talks about the benefits.
"ESG investing is also known as sustainable or impact investing. There are many flavors of ESG funds; they may, for example, funnel investor money into wind and solar companies or those with diverse board members, or steer funds away from firms involved in fossil fuels." (Iacurci, 2022).
Writer, Greg Iacurci, who published the article on November 22, says that ESG investing has actually become more popular. He says that 2021 showed $69.2 billion in investments. This directly contradicts what is said by Haskins in his article.
The article itself is mostly unbiased, other than a few Jabs at the Trump administration, one including his plan as "chilling". Where the bias is found is in the quotes. Unlike Fox News, the CNBC writer was able to get quotes from supporters of the new plan, such as officials from the Labor Department and the assistant secretary of the Employee Benefits Security Administration.
To round this up...
The most basic information about what the plan is is fairly similar. There is not much to the plan itself. Rather, the effects of the plan is where opinions begin to form in opposite directions. Fox News showed a major bias from the title onward. CNBC is more subtle with their bias, which is expected of this network. They're use of quotes from only supporters hint towards the sources alignment on this issue.
Both articles are very informative and gave me a lot of information to come to my own conclusions. I would recommend either of these if you wish to learn about Biden's newest plan.
Haskins, J. (2022, November 28). Biden wants your retirement savings to go woke. here are 3 ways to protect yourself. Fox News. Retrieved November 29, 2022, from https://www.foxnews.com/opinion/biden-retirement-savings-woke-protect-yourself
Iacurci, G. (2022, November 22). Biden administration loosens trump-era investing rules around environment, social and governance funds for 401(k) plans. CNBC. Retrieved November 29, 2022, from https://www.cnbc.com/2022/11/22/biden-administration-loosens-trump-era-esg-rules-for-401k-plans.html
Hi Morgan! Your post is extremely interesting. I hadn't heard much, or any for that matter, regarding a 401K plan from the Biden administration. I appreciate your summarization of each news outlet's representation of how the plan will effect citizens. It seems quite true that any plan Biden puts out will be heavily criticized by right wing leaning media outlets, similar to how former President Trump was heavily criticized by left leaning media outlets. That's just the way it goes in politics. People don't give you the benefit of the doubt; they only look for the flaws. I'm eager to learn more about this plan though as many of us will be effected by it no doubt.
ReplyDeleteHi Morgan! Thank you for sharing. I knew very little about Biden's new 401K plan so it was nice to get caught up by reading your post. It is also nice how you broke it down into varying news platforms because, as we know, everyone reports the news differently. It is upsetting to say that I feel there will be a lot of back and forth and changes in the next ten years because each President will want to come in and erase and re-make everything the previous President set into place. I hope soon we can reach a point where Presidents can learn to agree and accept each others decision for the greater good. Great post!
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