A group of Republican lawmakers this week introduced a bill that says a pension plan fiduciary must act solely in the financial and pecuniary interests of plan participants and beneficiaries.
Safeguarding Retirement Investment Options Act – introduced by U.S. Representatives Carol Miller (R-WV), Greg Murphy (R-NC), David Schweikert (R-AZ), and Lloyd Smucker (R-PA) – aims to prevent environmental, social and governance (ESG) issues from rising above monetary decisions and harming investment returns.
It comes in response to the Department of Labor’s proposed changes to ERISA regulations that state that ERISA plans “may often require” ESG factors. Lawmakers point out that recent data shows that large-cap funds with higher ESG ratings performed worse overall than those with lower ESG ratings.
“The Employee Retirement Income Security Act (ERISA) is supposed to protect retirement investment plans by requiring plan managers to be subject to fiduciary responsibilities,” Murphy said. “However, the Biden administration’s proposed changes to ERISA abandon fiduciary responsibility by allowing ‘woke’ ESG factors to dictate investment returns – putting Americans’ retirement savings at risk. Our goodwill legislation sense would impose strict enforcement measures to ensure that Biden’s “woke” policies do not hamper Americans’ retirement savings.
The bill is supported by several organizations, including America First Policy Institute, American Energy Alliance, ALEC Action, American Securities Association, Americans for Prosperity, Americans for Tax Reform, Competitive Enterprise Institute and FreedomWorks.
“Dr. Murphy’s bill is an important safeguard against the Biden administration’s attempts to dictate investment returns based on unsubstantiated ESG factors. At the state and federal levels, we must push back against these sweeping policies, protect the Americans’ retirement savings and strengthen our energy industry,” Miller said.