House bill would mandate that fiduciaries act only in financial interests of plan participants

A group of Republican lawmakers introduced legislation this week that mandates that a fiduciary of a retirement plan must act solely in the financial and pecuniary interest of the participants and beneficiaries of the plan.

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The Safeguarding Investment Options for Retirement Act – introduced by U.S. Reps. Carol Miller (R-WV), Greg Murphy (R-NC), David Schweikert (R-AZ), and Lloyd Smucker (R-PA) – is aimed at preventing environmental, social, and governance (ESG) issues from rising above pecuniary decisions and hurting investment returns.

It comes in response to the Department of Labor’s proposed changes to ERISA regulations that say ERISA plans “may often require” ESG factors. The lawmakers point out that recent data shows that large-cap funds with higher ESG ratings have seen a worse overall performance compared to 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 commonsense legislation would impose strict enforcement measures to ensure that ‘woke’ Biden policies do not hinder Americans’ retirement savings.”

The bill is supported by several organizations, including the 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 unfounded ESG factors. At the state and federal levels, we must push back against these radical policies, protect Americans’ retirement savings, and empower our energy industry,” Miller said.