AFGE Endorses Rep. Cleaver’s RESPOND Act to Protect Federal Pensions From Financial Risks of Climate Change
(Kansas City, MO) – Today, U.S. Representative Emanuel Cleaver, II (D-MO) applauded the American Federation of Government Employees (AFGE), the largest federal employee union, representing over 700,000 federal workers, for endorsing his legislation to address climate-related risks to federal pensions. In March, Congressman Cleaver introduced the Restructuring Environmentally Sound Pensions in Order to Negate Disaster (RESPOND) Act with Congresswoman Rashida Tlaib (D-MI) to establish a Federal Advisory Panel on Climate Change within the Federal Retirement Thrift Investment Board (Board) to formally study the financial risks posed by climate change to federal employee retirement benefits. If the Board finds that federal pensions would be better protected by divesting from the fossil fuel industry, then the Board would be required to immediately establish a plan to do so.
“As the largest union of federal employees, the AFGE has always been the strongest proponent of protecting federal workers and their hard-earned pensions,” said Congressman Cleaver. “It has become abundantly clear, based on multiple studies from reputable asset management firms and economists, that investments in the fossil fuel industry are a one-way ticket to the financial disaster. By allowing the Federal Retirement Thrift Investment Board to formally study the risks of climate-related investments and immediately begin to set a plan in place to divest, we can ensure the lifelong work of federal employees isn’t at risk of disaster—all while protecting our environment and the only planet God gave us.”
“Curbing investments in harmful, fossil fuels is not only good for the environment and our planet – it’s good for workers, too,” said Everett Kelley, National President of the American Federation of Government Employees. “According to Blackrock, the world’s largest asset manager, removing fossil fuels securities from the Thrift Savings Plan will have no negative impact on the rate of return federal employees get on their retirement savings. This change is an opportunity to take an important step toward addressing our climate emergency and saving our environment with no sacrifice to employees’ retirement savings. That’s why we support President Biden’s call to mitigate the impact of federal agencies’ financial activities on the environment. We also support the RESPOND Act, which would formally establish a process for reviewing and eradicating the financial risks of climate change in the TSP, and look forward to working with Congress on its passage.”
Last week, President Biden issued an executive order directing the Federal Retirement Thrift Investment Board to study whether investments in the fossil fuel industry were a threat to the Thrift Savings Plan and to provide a larger report of climate-related financial risks. Congressman Cleaver would like to see Congress codify this executive order into law and go a step further by ensuring the Board immediately puts a plan in place to divest from the fossil fuel industry if the study shows that federal pensions would be better served by doing so.
The Board currently oversees $770 billion in retirement benefits for over 6 million federal employees. The RESPOND Act would take steps to protect these retirement benefits by:
- Commissioning the Board to establish a “Federal Advisory Panel on Climate Change” to conduct a thorough examination of the financial risks posed by climate change to federal employee retirement benefits and report those findings to Congress.
- Instructing the Board to immediately set a plan in place to divest from the fossil fuel industry if the Board determines that pension yields would be bother financially profitable and consistent with fiduciary duties if divestment strategies were implemented.
- Implementing a “Climate-Choice” investment option to allow federal pension holders to opt into an investment plan that is completely divested from fossil fuels if the Board is unable to make a conclusive determination on whether divestment strategies align with their fiduciary responsibilities to pensioners.
- Requiring the Federal Reserve and SEC to jointly issue annual reports on the financial risks of climate change to ensure the federal government is doing its due diligence to fully understand and account for these risks and costs in future projections.
The RESPOND Act is endorsed by Sierra Club, World Wildlife Fund, Center for Biological Diversity, American Federation of Government Employees Local 704, Ceres, 350.org, Climate Hawks Vote, Climate Health Now, Catholic Network US, Earth Guardians, Center for International Environment Environmental Law, TIAA-Divest from Climate Destruction, Mother Out Front, Fossil Free California, Businesses for a Livable Climate, GreenFaith, Divest New Jersey Coalition, Stand.Earth, Global Choices, New York Green Education and Legal Fund, Call to Action Colorado, 350 Colorado, 350 Silicon Valley, 350 Seattle, 350 Ventura County, 350 Humboldt, 350 PDX, Giniw Collective, Rapid Shift Network, Colorado Businesses for a Livable Climate, Texas Campaign for the Environment, Zero Hour, Citizens Climate Lobby of Kansas City, and the Climate Council of Greater Kansas City.
Emanuel Cleaver, II is the U.S. Representative for Missouri's Fifth Congressional District, which includes Kansas City, Independence, Lee's Summit, Raytown, Grandview, Sugar Creek, Blue Springs, Grain Valley, Oak Grove, North Kansas City, Gladstone, Claycomo, and all of Ray, Lafayette, and Saline Counties. He is a member of the exclusive House Financial Services Committee; Chairman of the House Subcommittee on Housing, Community Development, and Insurance; member of the Select Committee on the Modernization of Congress; member of the Committee on Homeland Security; and a Senior Whip of the Democratic Caucus. For more information, please contact Matt Helfant at 202-590-0175 or email@example.com