Suppose you entrust me with money you save for your retirement. You make me sole trustee.

You give me guidelines. Such as invest in A-grade stocks and bonds only. Beyond that you make one thing clear. My job is to grow your retirement nest egg as much as possible.

Do I follow your instructions? Not really. Along the way I take a few diversions that cost you money.

First, I travel to a few demonstrations. Against companies I don’t like. I take my expenses out of your retirement money.

Next, I pull your money OUT of a bunch of good stocks and bonds. Companies that make guns. Or plastics, cigarettes or booze. Companies that drill for oil and gas. Or run pipelines to carry both. Companies that mine or ship coal.

Also, I dump stocks and bonds of other profitable companies. Those I think contribute big to global warming. I divest you of stocks of shipping companies I believe add to ocean pollution.

For good measure I sell your stocks of companies that deal with Israel. Because I don’t like Israel.

Meanwhile, I shift your investments into “socially responsible” companies. Good corporate citizens that make only enviro-friendly products. Solar companies. Windmill companies.

The end results of my strategy are stark. You end up with less money for retirement than you should have had. Because the socially responsible stocks and bonds I bought for you did poorly. Poorly compared with your stocks and bonds that I dumped.

You may be the sort of person who is happy with this. You don’t mind losing money, so long as you are virtuous with your investments. Warm feelings are your goal for retirement.

However, there is a chance that you might be a different type of person. You might scream at me. “WHAT ARE YOU DOING INJECTING YOUR FEELINGS INTO MY INVESTMENTS!?!? THIS IS MY MONEY, NOT YOURS.”

You might berate me for investing for my benefit and not yours. You might slam me for satisfying my enviro-needs with your money.

Such is the case against trustees of pension funds across the country. From village trustees to giant state retirement funds.

Here is a prime case history: California’s huge retirement funds lost billions by investing in socially responsible investments. And at the same time selling off investments in companies deemed un-worthy or evil by greens.

New York State’s retirement fund dumped stocks of gun makers. Enviro lobbyists pressure the state comptroller (the fund’s sole trustee) to sell the fund’s oil, gas, coal and pipeline stocks.

Thus far the comptroller has resisted pressure to divest of stocks that groups insist are evil. However, the governor ordered authorities to consider such divesting. Trustees of New York City’s retirement investments already caved.

And meanwhile, the New York State fund spends money lobbying and pressuring various companies. (Example: The fund raked McDonalds over the grill for buying chickens that did not have the nicest lives.) The companies have to listen because the fund owns so much of their stock.

New York and other funds spend money pressuring companies to change their hiring. To establish more diversity. And to behave in what they declare is a more “socially responsible” manner.

This lobbying might harm the profits of these companies. That would, in turn, harm the price of the stocks the retirement fund owns. Hmmmm.

But that is not the point. The point is as simple as the point I made about investing your retirement money.

The money in retirement funds belongs to the people who paid into these funds.

Let us suppose you are one of those workers. Your money does not belong to the trustees. It does not belong to the lobbying groups. None of them were elected to play around with your money to satisfy their anxieties. Their duty is to invest your money for the best return, within guidelines.

Politicians often declare they were elected to do just this. That is, elected to make decisions on your money.

Not true. They were elected to handle money you pay in taxes. They were not elected to exercise their good and bad judgement with money you paid into your retirement fund.

A better solution to this might be to split retirement funds into two.  One fund would follow a green and socially responsible course. The other would invest only for good returns. Only. Let the workers decide which fund they want for their retirement contributions.

As it stands now, too much of the people’s money gets invested for social reasons rather than growth.

There is a good reason this has come about. The world never runs out of people who want to use your money for their cause.

From Tom…as in Morgan.

Find Tom at tomasinmorgan.com. You can write to Tom at tomasinmorgan@yahoo.com.