Should retirement plan managers be required to prioritize financial returns over social and environmental returns?

Awaiting Vote
Bill Summary

H.R. 5339 amends the Employee Retirement Income Security Act of 1974 to limit the consideration of non-pecuniary factors in retirement plan investments. The bill requires managers of retirement investments to prioritize financial returns over non-financial goals, such as social or environmental factors, unless specific criteria are met. It also outlines that non-financial factors can be considered if investment options are financially equal. Sponsor: Rep. Rick Allen (Republican, Georgia, District 12)
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Opponents say

•      "Sustainable investments have demonstrated their potential to generate positive outcomes, both for the companies involved and for society as a whole. I’ve spent a good portion of my political life and career advocating for renewable energy, sustainability and common-sense practices. It just isn’t the role of government to dictate to corporations how they should invest their capital – as long as they abide by the law. When companies engage in sustainable practices while complying with regulatory frameworks, they can contribute to the betterment of our planet, our nation, and our society without compromising their bottom line." Source: Arizona Attorney General Kris Mayes 


•      "The rule's ``pecuniary'' vs. ``non-pecuniary'' distinction is arbitrary, flawed, and out of step with how ESG factors are considered by retirement asset managers, and many other investors. The Trump-era rule also prohibited investments with an objective, goal, or principal investment strategy that includes the use of one or more non-pecuniary (ESG) factors from being considered a qualified default investment alternative (QDIAs), such as a target date fund." Source: Committee on Education and the Workforce Democrats, Minority Opinion


Proponents say

•      "President Biden will stop at nothing to inject his costly, rush-to-green agenda into every aspect of Americans’ lives. By empowering financial advisors to invest Americans’ retirement savings in risky, climate-related ESG funds, the Department of Labor (DOL) is blatantly prioritizing its radical political agenda over Americans’ hard-earned savings. That is why I am proud to introduce the RETIRE Act, which will roll back President Biden’s overreaching rule and codify that retirement plan sponsors must make investment decisions based on financial returns. 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. The RETIRE Act would right this wrong and ensure Americans have a say in their financial future." Source: Rep. Rick Allen (Republican, Georgia, District 14)