On Tuesday, U.S. Senators Mike Braun (R-Ind.), Richard Burr (R-N.C.), Tommy Tuberville (R-Ala.), Cynthia Lummis (R-Wyo.), Roger Marshall (R-Kan.), Roger Wicker (R-Miss.), Steve Daines (R-Mont.), and James Inhofe (R-Okla.) introduced legislation to build a stronger retirement system for Americans by clarifying the fiduciary duty of plan administrators to select and maintain investments based solely on financial factors.
Recently, the Biden Administration Department of Labor proposed a rule that would essentially coerce workers and businesses into supporting corporations deemed “woke” through ESG (environmental, social and governance) funds. Several studies have shown that ESG investing policies have worse rates of return. In comparison to other investment plans, ESG investors generally end up paying higher costs for worse performances.
Braun
“At a time when energy costs are soaring and Hoosiers are grappling with record high inflation, Democrats are politicizing American retirement funds and targeting companies that invest in energy sources that could help alleviate these soaring costs,” Sen. Braun said. “The Biden Administration should not be sacrificing the retirement savings of thousands of individuals to promote liberal policy objectives.”
What the Maximize Americans’ Retirement Security Act does:
- Amends the Employee Retirement Income Security Act (ERISA) to require plan fiduciaries to select investments solely on pecuniary factors.
- If a fiduciary cannot distinguish between investments on pecuniary factors alone they may use non-pecuniary factors, but must provide participants reasoning for their decision.
- Pecuniary factors are defined as any factors that a fiduciary prudently determines is expected to have a material effect on the risk or return of an investment.
This legislation has been endorsed by:
- Americans for Tax Reform
- Institute for the American Worker
- Foundation for Government Accountability
- FreedomWorks
Click here to read the full text of the bill.