Grave Indifference
When pension investments stop being “neutral” and require fiduciary justification
An ICU nurse in a Minneapolis VA hospital clocks into a 9–5, contributes a mandatory portion of each paycheck to a pension plan attached to the job, and depends on that system for future retirement security when they are age-eligible. In order to generate returns that help deliver that future security, the $1.3-trillion Federal Employees Retirement System channels vast capital across the economy through diversified investment structures that enable industries shaping the conditions in which that nurse lives and works.
What is not observable in common practice is whether those fiduciary choices have been recently justified under current conditions.
Economists call trusts like pensions Universal Owners: having a scale of investment so broad that large institutional funds effectively hold pieces of the entire economy. Meanwhile, the asset-management status quo can describe this structure as “passive” or “neutral,” because it relies on generalized financial products designed to track market performance and distribute risk through pricing and diversification.
But passivity in this sense describes a method of investment, not a withdrawal from consequence nor a safe harbor in fiduciary law. What is called neutral is harm normalized, aggregated, and treated as background.
That matters because billion- and trillion-dollar pension portfolios built this way routinely allocate fiduciary capital to enterprises whose business models — whether by design or as a negative externality — produce instability, conflict, detention, surveillance, or environmental harm.
A new report by Stand.earth identifies more than $11 billion in holdings by U.S. and Canadian public pension funds in companies tied to U.S. Immigration and Customs Enforcement activities, including Palantir, CoreCivic, GEO Group and L3Harris.
“People should be horrified that their hard-earned money is enabling ICE to kidnap, murder, and terrorize our family, friends, and neighbors,” Todd Paglia, Executive Director with Stand.earth. “There is no excuse for investing in or financing these reprehensible companies who are profiting from racist, authoritarian violence.”
In the case of pensions, that outrage lands with force. These are trusts amassed to secure dignified retirements for identifiable beneficiaries — not abstract pools of capital free to pursue return without regard to how it is produced. For beneficiaries, discovering that part of that long-term personal stability may be buoyed by enterprise linked to detention, raids, surveillance, or systemic civic instability hits as a grotesque irony: security purchased, in part, through systems that produce insecurity.
Cruelty is legal. Indifference is not
Outrage alone is not legal leverage.
Watchdog reports like this trace how pension capital flows into enterprises tied to fossil fuel expansion, detention infrastructure, and enforcement systems. They identify holdings, quantify participation, and connect pension investments to real-world activity that is troubling for its mismatch between what that money is for and how it is used.
Yet courts have repeatedly shown that moral condemnation does not move pensions, and trust law does not forbid every investment linked to harmful activity.
Trust law governing defined-benefit pensions, including the Employee Retirement Income Security Act and analogous state statutes, does not dictate investment strategy, require maximized risk-adjusted returns, or mandate adherence to Modern Portfolio Theory. Convention — the common lore — says that. The law recognizes only conduct, and permits even harsh or dissonant decisions if fiduciaries act “with the care, skill, prudence, and diligence under the circumstances then prevailing.”
That standard is not about outcomes. It is about the quality of the decision-making process. And accountability, in trust law, is not exhausted at the moment of purchase. It is not one-and-done.
Unlike other financial players at scale, fiduciaries of pensions have a continuing obligation to monitor and reassess whether a given investment — active or passive — remains justified for their beneficiaries as circumstances change, as recognized by the Supreme Court in Tibble v. Edison International. What is absent from prevailing practice is not process itself, but evidence of it: records showing how decisions were made or reauthorized in light of current conditions, rather than inferred from standardized metrics, inherited allocations, or industry alignment.
In this case, the question is not whether any pension caused what happened in Minneapolis. It is whether the conditions surrounding that financial participation have changed since the investment was made.
Cruelty from fiduciary choice can be legal.
Indifference to changed foundations for deliberation is not.
When participation stops being background
This is where reports like Stand.earth’s can take on a different legal significance.
Typically, such reports are treated as advocacy — mapping where pension money flows and why that may be troubling. But they can also serve a more precise function: identifying when the circumstances surrounding that participation have changed in ways fiduciary law cannot ignore.
They do more than trace the money.
They begin to remove the assumption that nothing has changed.
A workable threshold emerges when a pension fiduciary’s financial participation becomes:
Specific — tied to identifiable companies, contracts, and activities
Current — ongoing, not merely historical
Foreseeable — linked to reasonably predictable consequences
Relevant to beneficiaries — affecting the conditions in which they live, work, and retire
When those conditions are present, the investment is no longer abstract. It no longer sits passively in the background. It is no longer neutral. And once participation is no longer neutral relative to current conditions, prior approval is no longer sufficient. It requires fiduciary deliberation to be reauthorized.
Instead of:
Identify → outrage → demand divestment
A fiduciary challenge asks:
Identify → establish non-neutrality → trigger duty to review → require proof of deliberation
That is an actionable burden — one that lives in a judge’s purview when outrage does not.
The public record may show that companies tied to ICE enforcement activity profited from expanded operations, and that pensions held those firms. What it rarely shows, with precision, is how much any given pension gained from that activity.
But fiduciary law does not require outside observers to reconstruct that accounting. Profiteering, even from unseemly events, is not itself a breach. A lack of decision-making evidence is harder to ignore.
Trust law requires fiduciaries to explain why continued participation remained prudent once that participation was identifiable and no longer abstract.
If Not Proof, Then a Test
Public pension fiduciaries will respond to critical reports like this — but typically in the generalized language of policy, process, and market convention: diversification, index-based strategies, long-term risk management, and stewardship through proxy voting.
These responses are real. But they do not comprise a full record of deliberation. They do not answer the operative question:
Where is the record that this participation was evaluated and justified under current circumstances for these beneficiaries?
Industry alignment does not substitute for fiduciary judgment. In law, prudence is bespoke. In practice, it is treated as standardized.
Whether the killing of nurse Alex Pretti satisfies the threshold of a changed circumstance is not the dispositive question. Not every tragic or visible event requires fiduciary reauthorization. That is a high bar.
But where participation becomes specific, current, foreseeable, and relevant to beneficiaries, it can no longer be treated as background.
Once that threshold is crossed — even arguable — the obligation is triggered.
Fiduciary law does not prohibit bad outcomes.
It prohibits unexplained decisions.
If the money is already there, who decided it should still be?
Every person covered by a pension should be taking this article to their union rep and asking the key questions you have laid out so clearly. The dots that need to be connected here are that through the language itself all pension fund beneficiaries are participating in the very example that you used in your story. We are all 'mandatory contributors' to the degradation of our social and ecological fabric of our communities.
With a little effort and a few pointed questions, why can't these billions and trillions be used to make the world better for all people?