Rep. Allen's RETIRE Act Advanced by Committee

Yesterday, the House Committee on Education and the Workforce advanced H.R. 5339, the Roll back ESG To Increase Retirement Earnings (RETIRE) Act.

This critical legislation, introduced by Congressman Rick W. Allen (GA-12) earlier this month, would require Employee Retirement Income Security Act (ERISA) retirement plan sponsors to prioritize financial returns over environmental, social, and governance, or ESG, factors when making investment decisions on behalf of their clients.

During yesterday's markup, Congressman Allen delivered the following remarks, as prepared for delivery, prior to the bill's passage:

"Thank you, Madam Chair. I would like to offer an amendment in the nature of a substitute for the Roll back ESG To Increase Retirement Earnings (RETIRE) Act, or H.R. 5339, which would ensure that retirees’ savings are invested based on economic factors rather than social or political ones.

"This legislation comes as financial institutions become more brazen in professing partisan and ideological preferences when investing Americans’ hard-earned retirement savings. ESG factors that do not have economic impact amount to hijacking other peoples’ money for Left-wing activism.

"Since its original enactment in 1974, the Employee Retirement Income Security Act (ERISA) protections require a fiduciary to act 'solely in the interests of participants and beneficiaries' and for the 'exclusive purpose' of providing retirement benefits.

"In other words, retirement plan sponsors have a duty to invest their clients’ hard-earned money in a manner that maximizes financial returns and minimizes risk. Period.

"In 2014, the Supreme Court backed this up by ruling that, under ERISA, a fiduciary is required to act solely for the financial benefit of participants by maximizing financial returns, which does not cover nonmonetary benefits, such as ESG benefits.

"Yet, last year, the Biden DOL blatantly ignored ERISA and the Supreme Court ruling when they finalized a rule that allows financial advisors to invest Americans’ retirement savings into ESG funds, which are proven to carry higher risk and charge steeper fees.

"The Biden Administration then continued to cling to this radical rulemaking despite bipartisan and bicameral disapproval in the form of a Congressional Review Act that was able to pass both the House and Senate before being vetoed by the President.

"This only proved that President Biden will stop at nothing to inject his costly, rush-to-green agenda into every aspect of Americans’ lives.

"Under so-called 'Bidenomics,' Americans are struggling to afford basic necessities like gas and groceries. The last thing hardworking taxpayers need is for their retirement savings to be depleted due to politically-motivated mismanagement.

"Maximizing retirement savings for every working or retired American with a 401(k) or an IRA pension fund is not a second-order priority. It is the first and only priority.

"Republicans will not sit by as retiree interests are subordinated to the whims of Left-wing activists.

"The RETIRE Act makes clear what ERISA intended. Investment fiduciaries may never sacrifice returns, take on additional investment risk, or increase costs to promote goals unrelated to accumulating benefits for retirement.

"In the not-too-distant past, financial institutions would make investments on standards of return, credit, collateral, raw data, and balance sheet numbers. This was the responsible way and will be the way going forward if we pass the RETIRE Act."

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