The U.S. House of Representatives passed a bill last week that requires retirement plan managers to prioritize maximizing returns for beneficiaries above any other objective.
The passage of the Protecting Prudent Investment of Retirement Savings Act (H.R. 2988), initially sponsored by U.S. Rep. Rick Allen (R-GA), was applauded by Rep. Jodey Arrington, chairman of the House Budget Committee.
“Under the extreme climate and social policy agenda of the Biden administration, financial advisors were encouraged to steer Americans’ hard-earned retirement savings into climate and social justice related endeavors instead of maximizing financial returns,” Arrington said. “By law, fiduciaries are required to act in the best financial interests of their clients – which is exactly the opposite of putting someone’s retirement savings at risk just to appease activists.”
Specifically, the bill would prohibit fiduciary financial advisors from prioritizing any objective other than maximizing beneficiaries’ returns when they make investment decisions on behalf of their shareholders. This includes climate and social considerations, among others.
Under this bill, retirement plans would be required to provide notices to participants allowing them to select from designated investment alternatives. The bill would also ensure that the hiring and retention of pension plan employees are based on merit, not on race or sex.
“I am proud to support the Protecting Prudent Investment of Retirement Savings Act to safeguard retirement savings and ensure hardworking Americans can retire with peace and prosperity, not woke and broke,” Arrington said.
The bill now moves to the senate for consideration.