[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
INVESTING FOR THE FUTURE: HONORING
ERISA'S PROMISE TO PARTICIPANTS
=======================================================================
HEARING
Before The
SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS
of the
COMMITTEE ON EDUCATION AND WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, APRIL 30, 2025
__________
Serial No. 119-9
__________
Printed for the use of the Committee on Education and Workforce
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: edworkforce.house.gov or www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
61-523PDF WASHINGTON : 2025
COMMITTEE ON EDUCATION AND WORKFORCE
TIM WALBERG, Michigan, Chairman
JOE WILSON, South Carolina ROBERT C. ``BOBBY'' SCOTT,
VIRGINIA FOXX, North Carolina Virginia,
GLENN THOMPSON, Pennsylvania Ranking Member
GLENN GROTHMAN, Wisconsin JOE COURTNEY, Connecticut
ELISE M. STEFANIK, New York FREDERICA S. WILSON, Florida
RICK W. ALLEN, Georgia SUZANNE BONAMICI, Oregon
JAMES COMER, Kentucky MARK TAKANO, California
BURGESS OWENS, Utah ALMA S. ADAMS, North Carolina
LISA C. McCLAIN, Michigan MARK DeSAULNIER, California
MARY E. MILLER, Illinois DONALD NORCROSS, New Jersey
JULIA LETLOW, Louisiana LUCY McBATH, Georgia
KEVIN KILEY, California JAHANA HAYES, Connecticut
MICHAEL A. RULLI, Ohio ILHAN OMAR, Minnesota
JAMES C. MOYLAN, Guam HALEY M. STEVENS, Michigan
ROBERT F. ONDER, Jr., Missouri GREG CASAR, Texas
RYAN MACKENZIE, Pennsylvania SUMMER L. LEE, Pennsylvania
MICHAEL BAUMGARTNER, Washington JOHN W. MANNION, New York
MARK HARRIS, North Carolina VACANCY
MARK B. MESSMER, Indiana
RANDY FINE, Florida
R.J. Laukitis, Staff Director
Veronique Pluviose, Minority Staff Director
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SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS
RICK ALLEN, Georgia, Chairman
ROBERT F. ONDER, Jr., Missouri Mark DeSaulnier, California,
JOE WILSON, South Carolina Ranking Member
VIRGINIA FOXX, North Carolina JOE COURTNEY, Connecticut
JAMES COMER, Kentucky DONALD NORCROSS, New Jersey
BURGESS OWENS, Utah LUCY McBATH, Georgia
LISA C. McCLAIN, Michigan JAHANA HAYES, Connecticut
MICHAEL A. RULLI, Ohio GREG CASAR, Texas
RYAN MACKENZIE, Pennsylvania SUMMER L. LEE, Pennsylvania
MICHAEL BAUMGARTNER, Washington JOHN W. MANNION, New York
RANDY FINE, Florida MARK TAKANO, California
C O N T E N T S
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Page
Hearing held on April 30, 2025................................... 1
OPENING STATEMENTS
Allen, Hon. Rick, Chairman, Subcommittee on Health,
Employment, Labor, and Pensions............................ 1
Prepared statement of.................................... 4
DeSaulnier, Hon. Mark, Ranking Member, Subcommittee Health,
Employment, Labor, and Pensions............................ 5
Prepared statement of.................................... 8
WITNESSES
Schanzenbach, Max, Seigle Family Professor of Law,
Northwestern University Pritzker School of Law............. 10
Prepared statement of.................................... 12
Crain, Charles, Managing Vice President of Policy, National
Association of Manufacturers............................... 16
Prepared statement of.................................... 18
Rees, Brandon, Deputy Director, American Federation of Labor
and Congress of Industrial Organizations, (AFL-CIO)........ 25
Prepared statement of.................................... 26
Brannon, Ike, President, Capitol Policy Analytics............ 35
Prepared statement of.................................... 37
ADDITIONAL SUBMISSIONS
Ranking Member DeSaulnier:
Report dated February 2025, titled ``Shareholder
Proposals: An Essential Investor Right''............... 57
Article dated April 21, 2025, titled ``Dow Headed for
Worst April Since 1932 as Investors Send `No
Confidence' Signal''................................... 85
Letter dated December 13, 2021, from BlackRock........... 93
Report dated December 2024, from the Joint Economic
Committee titled ``Trump's Tariff Plans Would Drive Up
Costs for Families and Shrink the Economy''............ 101
Statement dated April 30, 2025, from Americans for
Financial Reform Education Fund (AFREF)................ 103
INVESTING FOR THE FUTURE: HONORING
ERISA'S PROMISE TO PARTICIPANTS
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Wednesday, April 30, 2025
House of Representatives,
Subcommittee on Health, Employment, Labor, and
Pensions,
Committee on Education and Workforce,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:17 a.m., in
Room 2175, Rayburn House Office Building, Hon. Rick Allen
(Chairman of the Subcommittee) presiding.
Present: Representatives Allen, Foxx, Rulli, Mackenzie,
Fine, Walberg, DeSaulnier, Courtney, Hayes, Lee, Mannion,
Takano, and Scott.
Staff present: Vlad Cerga, Director of Information
Technology; Libby Kearns, Press Assistant; Katerina Kerska,
Legislative Assistant; Trey Kovacs, Director of Workforce
Policy; Campbell Ladd, Clerk; R.J. Laukitis, Staff Director;
John Martin, Deputy Director of Workforce Policy/Counsel; Audra
McGeorge, Communications Director; Daniel Nadel, Legislative
Assistant; Ethan Pann, Deputy Press Secretary and Digital
Director; Kane Riddell, Staff Assistant; Carl Rifino, Intern;
Sara Robertson, Press Secretary; Ann Vogel, Director of
Operations; Ali Watson, Director of Member Services; Joe
Wheeler, Professional Staff Member; James Whittaker, General
Counsel; Jeanne Wilson, Retirement Counsel; Ellie Berenson,
Minority Press Assistant; Ilana Brunner, Minority General
Counsel; Ni'Aisha Banks, Minority Staff Assistant; Dylan
Dunson, Minority Intern; Daniel Foster, Minority Senior Health
and Labor Counsel; Jo Howard, Minority Grad Intern; Amanda Lee,
Minority Grad Intern; Dhrtvan Sherman, Minority Research
Assistant; Raiyana Malone, Minority Press Secretary; Kevin
McDermott, Minority Director of Labor Policy; Veronique
Pluviose, Minority Staff Director; Banyon Vassar, Minority
Director of IT.
Chairman Allen. The Subcommittee on Health, Employment,
Labor and Pensions will now come to order. I note that a quorum
is present. Without objection, the Chair is authorized to call
a recess at any time. Today's hearing is about protecting the
retirement savings of American workers from the previous
administration's attempt to water down ERISA's cornerstone
fiduciary principle, and investments were made in the financial
interest of workers and retirees.
During President Trump's first administration, the
Department of Labor finalized rules with clear guidelines on
investing and proxy voting, but the Biden-Harris administration
revoked those protective rules and replaced them with weak
rules that threaten the retirement savings of all Americans.
As justification for revoking the Trump administration
rules, the Biden-Harris DOL was misleading. Some would say they
outright lied. At that time, DOL said it's rule was needed to
clear up any uncertainty surrounding whether a fiduciary under
ERISA may consider ESG and other factors in making investment
and proxy voting decisions under the Trump Rule standard.
The Biden-Harris administration repeatedly cited concerns
and confusion raised in secret, unnamed stakeholders regarding
whether climate change and other ESG factors may be treated as
monetary factors under the Trump Rule. The misleading
justifications the Biden-Harris DOL gave for revoking the Trump
Rule ranged from cherry picking history to outright misstating
the facts.
DOL's real aim was to cast doubt on the Trump Rule to
bolster credibility for its own abrupt break with ERISA's core
fiduciary duties. By creating an overly broad tie breaker rule,
the Biden-Harris administration allowed retiree's savings to be
used to finance the latest pet policy goals of the left.
In fact, the previous administration stated in the preamble
to the proposed rule for many years the Department's
nonregulatory guidance would recognize that, under the
appropriate circumstances, ERISA fiduciaries can make
investment decisions that reflect climate change and other ESG
considerations, including climate related risk and choose
economically targeted investments selected in part for benefits
apart from their investment return.
This statement is so far from ERISA's duty of loyalty and
the Supreme Court's expressed statement of ERISA's duty of
loyalty, it calls for immediate action to protect the
retirement savings of American workers. Americans invest to
secure their future, not to fund the Green New Deal or leftist
pet projects.
Fiduciaries governed by ERISA should not be allowed to make
investments they know will not pay dividends. A fiduciary's
most important responsibility is to make investments that are
in the financial interest of workers and retirees. The mission
of DOL's Employee Benefit Security Administration is to ensure
the retirement, health, and other workplace benefits of
American workers and their families.
Instead of upholding this mission, the Biden-Harris
administration DOL deliberately confused investing for the
purpose of providing benefits with attempting to invest to
advance partisan social and political goals.
Congress reacted swiftly. Within the first 3 months of
2023, the House and Senate passed a congressional Review Act
Resolution to nullify the Biden-Harris administration's ESG and
Proxy Voting Rule.
However, when the CRA Resolution reached President Biden's
desk, he vetoed it. In the last week I introduced the
Protecting Prudent Investment of Retirement Savings Act, which
seeks to codify those who manage other people's retirement
savings under ERISA must prioritize maximizing returns for a
secure retirement, rather than political or social impact using
risky ESG factors.
Americans hard earned retirement savings should never be
jeopardized by politically motivated mismanagement.
Unfortunately, the Biden-Harris administration made this
possible with an overreaching rule that allows fiduciaries to
aggressively invest retiree's money in the ESG funds, which
often charge steeper fees, carry higher risk, and have lower
returns.
The Protecting Prudent Investment of Retirement Savings Act
would codify the retirement plan sponsors that is making
investment decisions solely based on financial returns,
ensuring American's hard-earned savings are invested sensibly.
I look forward to discussing this legislation and other
efforts to protect ERISA plan savings for retirement. With
that, I yield to the Ranking Member for an opening statement.
[The statement of Chairman Allen follows:]
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Mr. DeSaulnier. Thank you, Mr. Chairman, and I want to
thank the witnesses before the hearing, or the start of the
hearing. Today's hearing is expected to focus on what is called
the Environmental, Social, Governance, or ESG factors when
making investments for retirement plans covered by ERISA.
Let us be clear about what ESG factors are. If a company is
exposed to certain risks such as sea level rise because of
climate change, child labor violations, or a record of poor
corporate governance or mistreating workers, its stock could
suffer over time.
Retirement plan professionals must consider a long-term
horizon when making investment decisions, as workers often
contribute for decades before drawing down on what they save.
It should be considered a best practice for retirement plan
professionals to appropriately weigh ESG factors appropriately.
That premise should not be controversial, or at least Committee
Democrats do not think it should be. It is prudent in the words
of a former Republican President, ``Prudence.''
There is no Biden-era mandate for retirement plans to
invest in ESG funds. Let me repeat that. There is no mandate
for retirement plans to invest in ESG funds. In fact, the
Biden-era ESG Rule does not change the fiduciary standard to
which professionals making investment decisions for retirement
plans are bound.
The rule has been upheld twice by a Federal District Court,
most recently in February. In his opinion, the Judge who was
nominated by President Trump, wrote that the Biden-era rule,
``Does not violate ERISA's text because it never permits
fiduciaries to deviate from exclusively achieving financial
benefits for the beneficiaries alone.''
To be clear, consideration of ESG factors is entirely
consistent with making a profit. BlackRock, which is the
world's largest asset manager, has stated that its,
``Investment conviction is that incorporating sustainable
related factors, which are often characterized and grouped into
ESG categories into investment decisions can provide better
risk adjusted returns to investors over the long term,'' from
BlackRock.
Last Congress the Committee considered two bills that would
codify two rules from the first Trump administration that would
establish needless barriers for the consideration of the ESG
related investments in proxy voting. These bills were premised
on the Republicans' mistaken view that they know best when it
comes to ESG investing.
Committee Democrats opposed these bills because we trust
the professionals who are legally bound to make prudent
decisions on behalf of retirement plan participants. Mr.
Chairman, we just returned from a 2-week district work period,
and I held several town hall meetings in the district I
represent, a district that is the fifth wealthiest by household
income in the United States.
When I held several town halls with these constituents,
people are concerned with the harm that's the Trump
administration has been causing over the past 100 days,
including to their investment portfolio.
President Trump's reckless tariffs have spurred chaos in
the financial markets. The Wall Street Journal reported that
the Dow Jones has had its worst April performance since 1932.
We remember what happened in 1932, which obviously matters for
workers participating in ERISA covered retirement plans.
JPMorgan Chase's CEO, Jamie Dimon, warned in his annual
shareholder letter that tariffs will likely increase inflation,
and cause many to consider greater probability of a recession.
The Trump administration is also cutting thousands of jobs at
the Social Security Administration and reducing access to phone
service.
This is anticipated to hurt the Agency's ability to serve
the public and recipients of social security that they paid
into, and that could amount to a backdoor cut as benefits
delayed are often benefits denied. Meanwhile, Republicans in
Congress still apparent on cutting Medicaid to help pay for the
massive tax cuts for the rich.
According to UC Berkeley Labor Center, California, could
expect to see 10 to 20 billion fewer Federal dollars per year
to Medi-Cal, our state's Medicaid program. The Labor Center
estimates a loss of this magnitude could threaten healthcare
for many of the nearly 15 million Californians currently
enrolled in Medi-Cal, and it could lead to as many as 217,000
job losses in the healthcare sector among other industries.
Combined efforts of these policies will be devastating for
retirees and low-income Americans. We can do better. I believe
retirement security is fundamentally aligned with worker's
wages. The more people earn, the easier it is for them to plan
and save for retirement.
It is incredibly hard for workers to do much on their own
for retirement, when according to the Federal Reserve many
would struggle to come up with the money to finance an
unexpected $400 expense, such as a car repair or a medical
bill.
At a minimum, we must support policies that increase
worker's wages and strengthen their ability to organize and
collectively bargain. The data is clear that unionized workers
have greater access to retirement plans and higher
participation rates than our nonunionized counterparts, but we
should not stop there.
We must strengthen and protect Social Security. We also
must address inequities and discriminatory barriers in the
labor market. I hope we have a productive conversation this
morning and focus on meaningful solutions for workers and
retirement plan participants. I yield back.
[The statement of Ranking Member DeSaulnier follows:]
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Chairman Allen. I thank the gentleman for yielding.
Pursuant to Committee Rule 8-C, all members who wish to insert
written statements into the record may do so by submitting them
to the Committee Clerk electronically in Microsoft Word format
by 5 p.m., 14 days after this hearing.
Without objection, the hearing record will remain open for
14 days to allow such statements and other extraneous material
noted during the hearing to be submitted for the official
hearing record.
I will now turn to the introduction of our four
distinguished witnesses. Our first witness is Professor Max M.
Schanzenbach, the Seigle Family Professor of Law at the
Northwestern University Pritzker School of Law in Chicago,
Illinois.
Our second witness is Mr. Charles Crain, the Managing Vice
President for Policy for the National Association of
Manufacturers in Washington, DC. Our third witness is Mr.
Brandon Rees, the Deputy Director, Corporations and Capital
Markets for the American Federation of Labor and Congress of
Industrial Organizations, AFL-CIO.
Our last witness is Mr. Ike Brannon, the President for
Capitol Policy Analytics, based here in Washington, DC. We
thank the witnesses for being here today, and we look forward
to your testimony. Pursuant to Committee Rules, I would ask
that you each limit your oral presentation to a 3-minute
summary of your written statement.
The clock will count down from 3 minutes, as Committee
members have many questions for you, and we would like to spend
as much time as possible on those questions. Pursuant to
Committee Rule 8D, and Committee practice, however, we will not
cutoff your testimony until you reach the 5-minute mark. I
would also like to remind the witnesses to be aware of their
responsibility to provide accurate information to the
Subcommittee.
I will first recognize Professor Schanzenbach for your
testimony.
STATEMENT OF PROFESSOR MAX M. SCHANZENBACH, SEIGLE FAMILY
PROFESSOR OF LAW, NORTHWESTERN UNIVERSITY PRITZKER SCHOOL OF
LAW, CHICAGO, ILLINOIS
Mr. Schanzenbach. Good morning. Thank you for the
opportunity to appear before you today. I am Max Schanzenbach,
Seigle Family Professor of Law at Northwestern University. ESG
investing under ERISA and trust law has been a focus of my
research for several years.
I have developed a healthy and informed respect for the
regulatory framework of ERISA, which provides working Americans
access to our deep and efficient capital markets, while
protecting retirement savings for the imposition of fiduciary
obligations.
In my opinion, the Protecting Prudent Investment of
Retirement Savings Act makes three important contributions to
existing law, and I will spend a minute on each one. First,
this legislation rightly clarifies that all investing
strategies must be justified only based on financial or
pecuniary benefit, which puts ESG investing on an equal footing
with any other active investing strategy.
There is a strange belief out there that ESG is magic, that
somehow so-called ESG factors can be used to do good and
improve risk and return without tradeoff, and that this will
continue forever.
That idea is contrary to long-standing financial theory,
and experience in capital markets, yet this belief has misled
many people, even some sophisticated actors, into believing
that somehow fiduciary obligations are different under ESG
investing. They are not.
At the same time nothing in the legislation discourages
risk and return ESG investing, investing for financial return
based on ESG factors. Few would argue that mass toxic
environmental torts, and other legal and regulatory risks are
financially unimportant.
Second, the bill continues to allow for the so-called tie
breaker, a rare case in which nonpecuniary factors may be
considered when two investments are otherwise financially
equal. The bill requires enhanced documentation and provides
greater clarity of language than present regulations.
Enhanced documentation ensures that an ERISA fiduciary is
loyal, always acting for the exclusive purpose of providing
pecuniary benefits under the plan, a cornerstone of ERISA.
Enhanced documentation also ensures that the tie breaker is
credibly established and regularly assessed. This is the
standard of care or prudence, another cornerstone fiduciary
obligation under ERISA.
The event of a tie between investment alternatives is
unlikely, and it is even less likely that such a tie will
continue to persist as economic conditions change. Given the
rarity of tie breakers, placing the burden of proof on the
fiduciary to establish one makes complete sense, and is a
standard approach in fiduciary law.
In addition, the bill clarifies essential language
regarding a tie breaker, defining a tie between investment
alternatives to be when pecuniary factors were not sufficient
to choose between them, and requiring the choice to be
consistent with the interests of the beneficiaries.
The current regulation states that the two investments, by
contrast, must equally serve, ``the financial interests of the
plan.'' The problem with this language is that the plan does
not have financial interests. Its beneficiaries do. They must
be benefited by the investment choice.
While I believe that a Court should read, ``financial
interests of the plan to mean its beneficiaries,'' I am unsure
of whether a Court will. Third, the legislation protects
workers in qualified default investment alternatives, or QDIAs,
by a simple prohibition against including any fund as a QDIA
that considers non-pecuniary factors.
The QDIA is where workers retirement funds are placed when
the worker does not specify an investment when investing in
defined contribution plans. In many, if not most plans, this is
a majority of defined contribution savers. This protective rule
is justified for two reasons.
First, workers who default into a plan may be there because
they have not put thought into their investment choices. As
such, they are more likely than not, unaware of the social
factors being used in a fund, and they may well disagree with
them.
Second, some investors may rely on the default option on
the belief that the defaults are wisely chosen to provide
diversification and appropriate risk and return. I thank the
Subcommittee for the opportunity to testify, and I look forward
to your questions.
[The prepared statement of Mr. Schanzenbach follows:]
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Chairman Allen. I now recognize Mr. Crain for your
testimony.
STATEMENT OF MR. CHARLES CRAIN, MANAGING VICE PRESIDENT OF
POLICY, NATIONAL ASSOCIATION OF MANUFACTURERS, WASHINGTON, D.C.
Mr. Crain. Thank you, Mr. Chairman, Ranking Member
DeSaulnier, and members of the Subcommittee. My name is Charles
Crain, and Im the Managing Vice President of Policy at the
National Association of Manufacturers. More than 85 percent of
manufacturing workers are eligible to participate in a
workplace retirement plan.
These Americans have probably never heard of a proxy
advisory firm, and they likely would be shocked to hear that
their pension or 401K plan assets could be used in a way that
could undermine their own retirement security. Publicly traded
manufacturers though, have long understood the risk that proxy
advisory firms pose to everyday Americans retirement security.
Public companies, after all, are the targets of proxy
firm's one size fits all governance standards. Manufacturers
have to counter proxy firms' errors, their outside influence,
their political agendas, and manufacturers are intimately
familiar with proxy firm's conflicts of interest, such as when
companies have to pay ISS for consulting services in order to
avoid a negative ISS recommendation.
Manufacturers, of course, also face pressure from ESG
activists who pursue political and social agendas at the
expense of the business and its shareholders. Whether companies
push back or fall in line, these market actors' outside
influence is, at best, a distraction for more productive uses
of time and capital.
At worst, it is a real threat to business growth and
shareholder returns, which ultimately undermine the risks of
beneficiary's retirement security. In the ERISA context, the
institutions that are hiring proxy firms are in many cases
doing so to help them vote the shares held by the ERISA plan.
Similarly, institutions that are voting in favor of ESG
shares or proposals or pursuing ESG investments, may be
managing ERISA plan assets. To put it simply, using plan assets
to pursue nonfinancial ESG goals, or blindly outsourcing the
voting power that comes with those plan assets to unregulated
and conflicted proxy firms represents a significant threat to a
fiduciary's obligations under ERISA.
That is why manufacturers support appropriate guardrails to
ensure that ERISA fiduciaries are acting in plan participants
best interests when making investment and voting decisions. The
DOL, during the first Trump administration, finalized rules to
do just that. One rule required fiduciaries to make investing
decisions based solely on pecuniary factors.
Another required appropriate due diligence when it comes to
ERISA plans proxy voting, and use of proxy advisory firms.
Unfortunately, as this has been discussed, the Biden
administration largely rescinded both of those rules. Just last
Chairman Allen introduced legislation to codify the reforms
from the first Trump administration.
This bill is crucial because the sole duty of ERISA
fiduciaries is to provide long-term returns that support
manufacturing workers and their families in their retirement
years. Now is the time for Congress and the DOL to stand up for
these workers and ensure that ERISA plans are operating in
their participant's best interest.
[The prepared statement of Mr. Crain follows:]
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Chairman Allen. Thank you, Mr. Crain. Next, I recognize Mr.
Rees for your testimony.
STATEMENT OF MR. BRANDON REES, DEPUTY DIRECTOR, AFL-CIO,
WASHINGTON, DC
Mr. Rees. Chair Allen, Ranking Member DeSaulnier, thank you
for the opportunity today to testify on behalf of the AFL-CIO
and our 15 million union members. In recent years, we have seen
a politicization of retirement plan investment decisions, but
this is not coming from fiduciaries, rather, certain
politicians have sought to turn the investment decisions of
retirement plan fiduciaries into a culture war issue.
Specifically, these political attacks seek to limit the
freedom of retirement plan fiduciaries to make investments and
devote proxies by considering environmental, social and
governance, or ESG risks.
While prudent experts may reasonably disagree over the
importance of ESG risk to investment returns, these differing
views are an inherent part of our capital markets, where
investors trade securities based on their differing investment
views, time horizons and risk tolerances.
The Protecting Prudent Investment of Retirement Savings Act
is the latest example of this misguided effort to prohibit ESG
investing. If enacted, this bill will restore the first Trump
administration's flawed attempt by the Department of Labor to
distinguish between so-called pecuniary and nonpecuniary
factors when making investments.
These previous rules were impermissibly vague because there
is no universally accepted definition of what is a pecuniary
versus a non-pecuniary consideration. This distinction is the
financial equivalent of debating how many angels can dance on
the head of a pin.
This misguided bill also effectively disenfranchises
retirement plans from voting proxies. Since the Reagan
administration, retirement plan fiduciaries have been
encouraged by the Department of Labor to manage proxy votes as
a plan asset, subject to ERISA's fiduciary duties.
The Chairman's bill reverses this Reagan-era ERISA
interpretation by imposing an unworkable prohibition on casting
proxy votes that promote so-called nonpecuniary benefits and
requiring a burdensome economic cost benefit analysis before
voting. As a result, ERISA fiduciaries will be coerced into
abstaining from voting, thereby silencing the ownership voice
of retirement plan participants and beneficiaries in our
capital markets.
We also note that the bill's proposed restrictions on proxy
voting by private sector retirement plans is patently
unconstitutional. Proxy voting is a form of free speech, and
imposing a burdensome requirement on proxy voting regarding ESG
issues is a clear First Amendment violation. Given that proxy
votes are valuable assets, compelling retirement plans to give
them up is a taking without just compensation under the Fifth
Amendment.
Congress should not be playing politics with workers
retirement savings. Legislative proposals to restrict the
freedom of private sector retirement plans to invest in vote
proxies have more in common with a totalitarian command economy
than a free market system. We urge Congress to address the
genuine retirement security issues that we face in our Nation,
rather than paranoid delusions about so-called woke ESG
investing by retirement plan fiduciaries. Thank you.
[The prepared statement of Mr. Reese follows:]
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Chairman Allen. Last, I recognize Mr. Brannon for your
testimony.
STATEMENT OF MR. IKE BRANNON, PRESIDENT, CAPITOL POLICY
ANALYTICS, WASHINGTON, D.C.
Mr. Brannon. Mr. Chairman, Ranking Member, thank you very
much for the invitation to be here. The last time I testified
in this room my daughter threw up on my tie right before I came
here, and I had to borrow the tie of one of the staffers here,
so R.J. if you are watching, I will bring your tie back.
I just want to emphasize the records that will be submitted
for the record that I just wanted to say two things about ESG
investing in general, based on some research I did with Robert
Jennings, a former colleague of mine, when I was a Professor at
Indiana University.
You know, the first point is, look, everybody who is making
their own investment decisions has every right to consider
whatever factors they want in making their decision, but I do
think it is problematic when fiduciaries start taking into
account things that might not be pertinent to long-term
economic growth, and I think that is what has been going on
with ESG.
The first point I would like to make is that the research
suggests that the idea that there is no loss from ESG investing
is, I believe, mistaken. The first point is that if you look at
the typical ESG fund, the management fee is significantly
higher than it is for the typical index fund. You know, the
beauty, as all of this in this room probably have money in TSB,
the beauty of TSB is that its management fees are close to
zero.
The typical ESG fund has, according to Morningstar, has a
management fee of about .1 percent higher than other funds. The
analysis I did with Professor Jennings suggested that it is
probably closer to one quarter percentage point. The second
thing to think about in terms of the problem with ESG investing
is that not only does it have a higher management fee because
decisions have to be made about what stocks are and are not
included into a fund.
Instead of in the next fund, where you automatically go
with the market index, when you have to regularly make
decisions about what does and does not belong based on long-
term decisions of these companies. The other problem is that as
you--and this is almost a physics rule, the more you narrow a
portfolio necessarily, the higher the risk, and the lower
return you are going to get, right?
This is a point that Matt Levine has made all the time, a
former columnist for Bloomberg News. If you are leaving out
entire sectors of the economy, you are going to be missing
something of what is going on. Then the last point I would like
to make is people think, well one tenth of a percentage point,
or one quarter of a percentage point does not seem like a very
big deal, but you know, thanks to the miracle of compound
interest over the 30 or 40 year career of a worker, that is
actually quite big.
A friend of mine, Jason Fuhrman, who was head of the
Council of Economic Advisors for the Obama administration put
out a study in 2016 looking at the Fiduciary Rule where he
observed that if you talk about a quarter point reduction in
the rate of return, you are talking about a reduction in total
retirement wealth upon retirement of about 10 to 12 percent.
I think the excuse that these things might be quite small
is no excuse to pursue this, thank you.
[The prepared statement of Mr. Brannon follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman Allen. Thank you. Thank you, Mr. Brannon. Under
Committee Rule 9, we will now question witnesses under the 5-
minute rule. I will recognize myself for 5 minutes.
Mr. Crain, in July 2020--in a July 2020 letter to the
Department of Labor, the National Association of Manufacturers
wrote that many ESG focused funds have a stated goal of
subordinating investor return or increasing investor risk for
the purpose of achieving political and social objectives.
Why isn't the only appropriate objective for an ERISA
retirement plan ensuring that the participants have a sound and
secure retirement?
Mr. Crain. For manufacturing workers who are depending on
an ERISA plan, whether it is a defined benefit or defined
contribution plan, they need that plan, and their families need
that plan to be there for them when they retire.
If you are an ERISA fiduciary, and you are making decisions
on behalf of that plan, whether it is what investments to
choose, how to vote the proxies, or whether to rely on a proxy
firm, you need to be making those decisions in the best
interests of those plan participants, so that the plan savings,
the plan's assets are there for them when they retire. That is
absolutely the bedrock of ERISA.
Chairman Allen. You mentioned, my bill, the Protecting
Prudent Investment Retirement Savings Act, what protections
does that bill provide?
Mr. Crain. Your bill would require that ERISA plan managers
make decisions based on plan participants best interests, both
by investing based only on pecuniary factors, which are those
that are relevant to the long-term performance of those assets,
and ensuring that those fiduciaries are undertaking appropriate
due diligence when it comes to both proxy voting and potential
use of service providers like proxy firms.
Both of those steps will be critically important to
protecting ERISA beneficiaries' retirement security.
Chairman Allen. Professor Schanzenbach, the term pecuniary
comes from a unanimous Supreme Court decision that outlines the
duty of loyalty. That decision states that ERISA's requirement
to act for the exclusive purpose of providing benefits means
financial benefits, such as retirement income.
Can you explain why pecuniary is the right term to govern a
fiduciary's investment decision?
Mr. Schanzenbach. Yes. I think an important part of the
statute of the proposed bill provides a definition of what a
pecuniary factor is, and it ties it back to risk and return,
right? It focuses the fiduciary's attention, which should be
laser focused on risk and return, and it cabins off anything
that is not affecting risk and return.
It is hard enough to make investment decisions and build a
plan menu and monitor the plan menu and pushing the fiduciary
to say we are only going to focus on financial factors is, I
think, sound policy. It is also most consistent with prevailing
understandings of ERISA in the law right now.
Chairman Allen. Yes, and it is common sense as well.
Mr. Schanzenbach. I do not disagree.
Chairman Allen. Professor, some ERISA defined contribution
plans allow participants to direct their investments from a
menu of investment options. Is this menu constructed and
maintained by ERISA plan fiduciaries, and if so, how is it
constructed and maintained?
Mr. Schanzenbach. The--I do not think ERISA specifies an
exact process, but I can probably give you an answer from sort
of what best practices are at the moment. When you are creating
a defined contribution plan, typically the employer appoints an
investment committee, who are ERISA fiduciaries, they may be
employees of the firm.
Then they often retain an investment advisor to advise them
on the construction of the plan. It is not just constructing
the plan that's important, it is the ongoing monitoring too. If
you are offering a mutual fund that has been offering sub-par
returns, you have a fiduciary obligation to remove it.
If you find a product that is similar or equal, but has a
lower fee structure, you may have an obligation to put that
into the plan and, so, creating a structure where there is
typically quarterly meetings and a professional investment
advisor, is how that is executed.
Chairman Allen. If a participant instead chooses to make
his investment selections through a brokerage window, why
should that participant be informed that the plan's investment
experts have not selected the investments in the brokerage
window as being appropriate for a retirement savings portfolio?
Mr. Schanzenbach. Right. I think that is an important part
of this legislation that I do not think has been spoken to yet.
There is something called a brokerage window, which allows plan
participants to--and it depends on the scope of the window. You
can broaden it to individual stocks, or you can keep it limited
to just classic, mutual funds.
It allows a participant to go outside the plan menu that
has been constructed by this investment committee with the
advice of the investment advisor, and then they are sort of on
their own. It is no longer a curated plan, and so, the bill as
I understand it, continues to allow people to do that, but it
puts what I would call like a consumer warning label on their
decision to do so.
I think one important part of that label is that it warns
them that they may pay higher fees. I mean one advantage of
these plans is that, you know, you may have a lot of money in
an individual mutual fund because of all the participants
choosing, and you get a lower fee as a result. You get a volume
discount essentially.
When you go outside, you are probably paying essentially a
retail fee. One of the--and I can say this anecdotally, there
is evidence that people sometimes use this window, and they
kind of pick something very similar, or maybe even identical to
what is in the plan, but they just pay a higher fee.
At least giving them that warning that they are leaving
something that has been curated under fiduciary obligations,
and that has probably a lower fee structure is I think helpful.
Chairman Allen. Okay. Great. Well, I yield back. I am out
of time, and I am going to call on Mr. Courtney for questions.
Mr. Courtney. Thank you, Mr., Chairman, and thank you to
the witnesses for being here today. I must say there is
something kind of surreal about this hearing today. There
definitely is a lot of concern out there by our constituents,
in terms of their retirement security, but what they are
concerned about is watching this economy get lit on fire by the
reckless policies of this administration.
We are seeing it unfold in real time as we are sitting here
right now. This morning's GDP numbers came out for the first
quarter. For the first time in 3 years, our economy contracted.
If you look again at the stock market, you can look on your
phone right now, I mean every indicator, S&P, Nasdaq, S&P Dow
are all down.
What is really disturbing is that the yield on bonds is
going up, I mean, which is not normal in terms of what happens
when equities go down. Investors usually shift to U.S. paper,
to U.S. bonds, but unfortunately, we are seeing a really
disturbing trend of where investors are actually moving away
from U.S. paper, or U.S. bonds, and the job numbers that came
out this morning from ADP, the private labor market trackers,
shows that in the month of April 62,000 job increased, really
one of the lowest numbers since the end of the pandemic.
This is all sort of happening right now. We all know why.
It is because of the reckless tariff policies that have been
put into place. One of Mr. Crain's members from Connecticut,
Stanley Black and Decker this morning announced that they are
raising the price of the iconic ``Made in America'' tools.
The headquarters is in my colleague's district in New
Britian, Connecticut, by high single digits because of tariffs.
okay. This problem is not slowing down, it is not just a
passing phase, it is actually gaining momentum.
To quote Mr. Crain, ``Congress should stand up for
workers.'' What we should do is claim our Article I powers to
basically control tariff policy and grab the steering wheel
away from the executive branch.
This is happening today in the Senate. They are taking up a
measure to use under the Emergency Powers Law that the
President cited, to take back Congress's authority under
tariffs. Speaker Johnson and the Republican majority in the
House should join that effort, in terms of again, protecting
the retirement savings of our constituents.
Like Mr. DeSaulnier, when I was home, and I am sure the
rest of my colleagues, they heard a lot about what is happening
to people's 401K plans, you know, burning up because of policy,
not because of external factors, not because of economic, you
know, catastrophes, but because of policy decisions that are
being made in Washington.
The attack on Social Security is just another layer of
insecurity that is being added here. Mr. Rees, on that point, I
mean through, you know, World Wars, through recessions, through
the crash in 2009, through the pandemic, the one pillar for
retirement security in this country has actually been the
Social Security system.
When we talk about again, your constituents, and working
families in general, I mean this attack in terms of hollowing
out the infrastructure of the Social Security, which DOGE has
been conducting, and having Elon Musk calling it a Ponzi
scheme, and something that he wants to ``eliminate,'' which he
said on Fox News.
Can you talk about what that means to working families in
this country, in terms of retirement security?
Mr. Rees. Thank you for the question, Congressman. You are
absolutely right that this is going to be devastating for the
retirement security of working people. The Social Security
Administration's staffing levels at the lowest level currently,
prior to these cuts that we have seen in 50 years.
We have got working people who are applying for Social
Security benefits across this country queuing up in line trying
to get their hard earned benefits because of these reckless
cuts that Elon Musk and DOGE have been making, all for the
purpose of saving money to fund President Trump's tax cuts for
rich billionaires like Elon Musk. That is unacceptable, and we
need to stop it.
I thank you for calling for Congress to assert its Article
I powers to take back authority from President Trump to restore
these jobs and restore our public sector employees.
Mr. Courtney. Thank you. Again, I have a lot of respect for
the Chairman. This is a legitimate issue that we can debate,
but honestly, it is like fiddling while Rome burns, in terms of
what the real threats to retirement security is. I yield back.
Chairman Allen. I thank the gentleman. I now recognize the
gentleman from Florida, Mr. Fine.
Mr. Fine. Well, thank you. Thanks for putting me at the
front of the line. I am not sure what I did to deserve that. It
is my first opportunity to ask questions and thank you all for
being here. My perspective on this notion is that, you know,
the stock markets you invest in the long haul.
Before I was a politician, that is certainly what I did. I
was reasonably good at making money, not so good at politics.
While I understand the concerns about tariffs, I think the
President is trying to fundamentally reorder how economics
work. Apparently, tariffs are a great idea when other countries
do them, they are just a terrible idea when we choose to
respond.
I am still trying to figure that one out. I want to focus
on the subject matter here of ESG, and Mr. Rees, you talked a
lot about politicization and paranoid delusions. I want to make
sure that I do not have any of those. My father is someone who
is a public employee, he was a professor for many years. He
benefited from owning these funds.
It is what drives his retirement, and fortunately he
benefits now. He is 76 years old, but as he went through his
career and those funds were invested on his behalf, do you
think there are any times when an investment manager should
make a decision on how to invest those funds that is driven by
anything other than what would maximize the returns that he
would get when he needs those funds, or should financial
returns be the sole criteria that a financial manager should
use to be making those financial decisions?
Mr. Rees. Congressman, it has been clear since ERISA was
passed in 1974 that the primary duty of fiduciaries is to
maximize risk adjusted investment returns in order to protect
the retirement security of plan participants and beneficiaries.
They may also consider collateral benefits under the all things
being equal test, that was previously referenced in the
Professor's testimony.
Mr. Fine. You said primary duty. What would their secondary
duties be? That implies if there is a primary duty, there are
other duties that they have other than making sure that my
father gets the maximum return when it was time for him to
retire.
What are those secondary duties that they have that they
should be spending their time on, other than making sure that
my father and other public employees like him get as much money
as they can? What are those secondary duties that they should
have?
Mr. Rees. Well, ERISA establishes fiduciary duties for
retirement plan fiduciaries, which is the duty of loyalty, the
duty of prudence, the duty to diversify portfolio assets, and
the duty to follow plan documents.
Mr. Fine. Yes, well diversity of investments will be part
of maximizing return. If you put all your eggs in one basket, I
think you are taking a pretty big risk. Can you think of any
examples ever--so, if I am an investment manager, I just want
to make sure I understand. I do not want paranoid delusions.
Can you think of any example ever? An investment manager
sits down, and he has got those funds, and his job is to
maximize that for the benefit of those workers who are doing
their jobs, and hoping that when they get to 65, or whenever it
is they have those funds, should they ever think about anything
other than maximizing the return that they are making, you
know, some feel good social, environmental benefits that may or
may not be good things, or not.
Should they ever say, you know what, I could maximize. I
can make a little bit more money for the people who are
depending on us. I am not going to do that because of these
environmental or social, or you would agree they should never
think about environmental or social issues if that would take
away from the maximization of the return that they would get on
that investment?
Mr. Rees. Well, ESG issues are often relevant to financial
considerations, and I will give you a real-life example.
Tesla's stock price peaked after President Trump's election
last November, however, since Elon Musk has gotten involved in
politics, Tesla's customers have been appalled.
They have been appalled by his alleged Nazi salute at
Inauguration Day. They have been appalled by his involvement in
the Department of Government Efficiency. As a result, Tesla's
earnings fell by 71 percent in the first quarter of this year.
Its stock price fell by 36 percent in the first quarter, so
I ask you, Congressman, how should a retirement plan fiduciary
weigh the controversial political activities of Elon Musk?
Mr. Fine. Great question. I actually am a three-time owner
of a Tesla. It is the car that I drive. I bought them when
apparently it was not cool for conservatives to own Tesla's,
apparently now it is. My colleagues in the Florida legislature
gave me a hard time back then about doing it.
I actually was there in the arena when Elon Musk made the
arm movement that so many Democrat politicians seem to make all
the time, and no one seems to be bothered by that. I would note
that as a Jewish member of the legislature, I find the notion
that it was a Nazi salute to be quite offensive.
That aside, if the investment manager believes that Elon
Musk's activities are going to have a deleterious effect on the
stock performance, then that would be a reason for them not to
invest, but it would not be because of economic, it would not
be because of environmental or social reasons, it would be of
those things.
I will wrap up with this. I see my time wrapping up. It is
your position that investment managers should always be
investing always in order to maximize performance. There is
never a reason when they should not?
Mr. Rees. Absolutely.
Mr. Fine. Okay. Thank you.
Chairman Allen. The gentleman's time has expired. I
recognize now the gentleman from California, Mr. Takano.
Mr. Takano. Thank you, Mr. Chairman. Thank you to the
witnesses for being here. Mr. Rees, why is considering
environmental, social and governmental factors, or otherwise
ESG, important when making long-term investment decisions? Turn
your mic.
Mr. Rees. Thank you. ESG factors are financially relevant
to financial performance, and it would be the equivalent of
sticking your head in the sand to ignore environmental, social
and governance risks when making investment decisions.
Mr. Takano. A majority of fiduciaries agree with you.
Recent surveys found that 90 percent of institutional
investors, 85 percent of chartered financial analysts, take
environmental, social and governmental, or ESG factors into
account when making investment decisions.
Mr. Rees, what are the risks of ignoring the ESG factors
when making long-term investment decisions?
Mr. Rees. Well, ERISA requires that fiduciaries act as a
prudent expert would act under similar circumstances, and as
you noted, prudent experts in our capital markets consider ESG
risks all the time because they are financially material to
investment returns.
Mr. Takano. Thank you. In recent years there has been a
heightened politicization of retirement plan investment
decisions. It has been the subject of several Committee
hearings and markups, and multiple Court cases. Let me
reiterate, the current Biden Rule, which has stood up to
multiple Court challenges, merely permits ESG factors to be
considered when making investment decisions.
Nothing in the current rule obligates ESG investing. Mr.
Rees, is this politicization of ESG factors coming from
fiduciaries?
Mr. Rees. No.
Mr. Takano. It is not. Attacks on ``woke'' have gone beyond
merely banning books or asserting curriculum control. Now, it
seems to me that politicians are reaching into American's
retirement accounts and investment portfolios to make sure that
no one is investing their money in a manner which does not
align with a certain ideology.
I would like to use my remaining time to talk about some
factors that are having real time impacts on retirees'
investments. President Trump's policies have resulted in the
highest market volatility since the COVID pandemic. A week and
a half ago, the Wall Street Journal suggested that the Dow
Jones Industrial Average was headed for its worst April
performance since 1932.
Mr. Rees, what impact has the stock market volatility had
on the retirement investments and pension plans of your
constituency?
Mr. Rees. Well, it has been devastating. President Trump's
Liberation Day announcement of reciprocal tariffs erased six
trillion dollars in market capitalization from the stock
market. It threw the bond market into a tailspin.
Mr. Takano. Let us be clear, who is your constituency?
Mr. Rees. I represent the AFL-CIO. We support tariffs, but
not how President Trump is implementing them on an ad hoc and
arbitrary basis that is undermining investor confidence in the
United States.
Mr. Takano. They are members of labor unions, they are
working men and women. Thank you. Yesterday republicans on this
Committee advanced their budget reconciliation proposal that
makes pathways out of student debt far less successful. Last
week, the republicans on the Energy and Commerce Committee are
expected to gut Medicaid.
Will these republican budget reconciliation measures
improve outcomes for retirees?
Mr. Rees. No. It will be devastating.
Mr. Takano. Let me close by underscoring this. Retirees are
facing immediate, dire consequences to their financial health
because of the policies of this administration, yet we are
spending our committee time restricting fiduciaries from using
the decisionmaking tools at their disposal, simply because the
majority here might not agree with them.
I want to ask all Americans would you like more politicians
involved in your financial planning? Should the members of this
Committee be making the decisions for you, or would you prefer
to trust the experts? I yield back, Mr. Chairman.
Chairman Allen. I thank the gentleman, and I now recognize
the gentlelady from Connecticut, Ms. Hayes.
Mrs. Hayes. Thank you. Everybody deserves to retire with
dignity, and we have had several hearings, so I welcome the
opportunity to continue to do that. Individuals and their
trusted advisors should be free to make investment decisions
that best reflect their values and offer them the highest
return on investment.
Environmental, social and governance factors, or ESGs, can
encompass a wide range of risks and opportunities in an
investment portfolio. Workers may not want their savings to go
toward a company that is polluting the environment, diverting
resources from struggling neighborhoods, or violating labor
laws.
In 2020, the Trump administration issued a rule which
limited the consideration of ESG factors in retirement plans
governed by the Employee Retirement Income Security Act, or
ERISA.
In 2022, the rule, in my opinion, was correctly reversed by
the Biden administration, ensuring that fiduciaries can focus
on all relevant factors when making investment decisions for
their clients. Trump administration and Republicans on this
Committee are pursuing many culture wars that offer investors
that do not offer investors real choices when deciding how
their savings will be used for retirement.
Mr. Rees, in your testimony you said enforcement of the
Trump Rule would impose undue regulatory burdens on retirement
plan fiduciaries. Can you discuss how ESG related factors are
sometimes necessary considerations for retirement investors,
and can you elaborate a little on how enforcement of the 2020
ESG Rule would be costly for investors?
Mr. Rees. Thank you for the question, Congresswoman. ERISA,
since it was enacted, it has regulated the investment process
for fiduciaries in making investment determinations. It has not
dictated the investment decisions, or prohibited, or required
specific types of investments.
That has been true in our capital markets since the 1950's,
since modern portfolio theory was developed. Prior to modern
portfolio theory, investors and fiduciaries were required to
invest in a legal list, which permitted investments. There was
government control over fiduciary decisionmaking.
Now, that was not in the best interest of plan participants
and retirees because the prudence of a portfolio should be
evaluated as a whole and not based on the individual investment
securities. ESG risks are real, and they do have a material
impact on investment returns.
Be that climate change, respect for human rights, or
corporate governance issues like excessive executive
compensation.
Mrs. Hayes. Exactly, and I think that how investments are
made matters. Tesla is a perfect example. I heard my colleague
say it is no longer cool to drive a Tesla. I think people still
appreciate lower emissions, or electric vehicles, or being
environmentally conscious, but it matters how we do that.
It matters how companies operate, and how they engage with
communities, so the product is not what is at--that people are
at odds with, it is the company that people are at odds with.
In 2023, there were over 143,000 Social Security beneficiaries
in my district, including more than 14,000 disabled workers,
and 7,000 children.
The administration, with many of the cuts led by Elon Musk
and DOGE, has laid off 7,000 workers within the Social Security
Administration, and is closing field offices across the
country. How have these cuts and lay-offs under this
administration impacted the millions who rely on programs
administered by the Social Security Administration?
What can we do to increase retirement benefits for American
workers?
Mr. Rees. Half of all working Americans in the United
States do not have access to a retirement plan through their
employer. They do not have an individual retirement account.
For these workers, they depend 100 percent on Social Security
for their retirement security after a lifetime of hard work.
Cutting the Social Security Administration is effectively a
benefit cut by frustrating the ability of working people to
receive their hard-earned social security benefits. The fact
that these cuts are being made for the sole purpose of tax cuts
for rich billionaires like Elon Musk, is simply unconscionable.
Mrs. Hayes. Thank you. Again, how these things are being
done matters because what I am hearing at home is the
unpredictability and the uncertainty. People are asking
questions that are not being answered, and that is quite
frankly, scaring the American people. With that, I yield back.
Mr. Walberg [presiding]. I thank the gentlelady, and I
recognize myself for 5 minutes for questioning, and thanks to
the panel for being here. Professor Schanzenbach, Congress
enacted ERISA to protect the benefits of American workers.
Under ERISA, as you know, investment fiduciaries have a
duty to invest exclusively for the purpose of providing
benefits and defraying reasonable expenses under the plan.
Why is this duty so important in protecting retirement
benefits?
Mr. Schanzenbach. The fiduciary duties are pushing the
investment committee, the people that have discretion to invest
ERISA assets, to focus laser like on risk and return. Without
that, there is less guidance for these fiduciaries, and they
may choose to follow policy preferences of their own without
consideration of the benefits for the workers.
Mr. Walberg. Could you discuss whether it would violate
ERISA's cornerstone duty of loyalty for an investment
professional to be motivated to produce a benefit, or a third
party, or to be motivated by his or her own sense of ethics
when investing someone else's retirement benefits?
Mr. Schanzenbach. Right. I think I can answer this by a
pretty simple example. We all understand the duty of loyalty
means that a fiduciary cannot reach into the retirement pot and
take out $50 for himself, nor can he reach in and take out $50
and give it to a favorite charity, okay?
We understand that that is self-dealing, that is a
violation of fiduciary obligation. It is no different if the
fiduciary impairs the investment returns so as to produce that
same benefit for third parties. It is all a breach of the duty
of loyalty and has been widely understood to be such in trust
investment law for generations.
Mr. Walberg. Yes, a point to ponder and to remember, yes.
Thank you. Mr. Crain, the Protecting Prudent Investment of
Retirement Savings Act would caution investment fiduciaries
against considering so-called ESG factors, unless these factors
have a financial impact on plan performance.
Please, if you would, explain the importance of retirement
plan participants being able to trust that their long-term
savings will be protected over any other considerations so that
they can enjoy a stable sense of retirement.
Mr. Crain. More than 85 percent of manufacturing workers
are eligible to participate in a workplace retirement plan.
These are, as the Subcommittee knows, defined benefit, defined
contribution plans governed by ERISA. Their sole goal in
participating in those retirement plans is that those assets,
those benefits, will be there for them when they retire.
It is absolutely crucial that the folks who are managing
those plans are doing so in a way to maximize the retirement
savings, the retirement security, of the participants. In this
context what that means is making investment decisions based
solely on pecuniary factors that are designed to maximize that
retirement security.
Mr. Walberg. Okay. Thank you. Mr. Brannon, you wrote in a
comment letter that, and I quote, ``Because of the miracle of
compound interest,'' my dad talked about that, ``even small
gains in returns can't over three or four decades that a person
saves for retirement, produce significant gains in wealth.''
What are your views on whether investment professionals
managing retirement savings should be chosen based exclusively
on the qualifications to manage these investments?
Mr. Brannon. Let me talk about this in a context about the
Pension Protection Act, which was passed in 2006, when I was a
staff economist on the Senate Finance Committee. One of the
things we struggled with was what the default investment was
going to be at the time.
I am not sure we got it right, but one of the things that
everybody on both sides clearly wanted is to make sure that
those were passive investments because everyone understands
that if you have an index fund, or something that is not
actively managed, that is when you get the lowest fees.
I think everybody understood at the time that allowing
something to be actively managed, and most ESG funds kind of
fall into that category, that is going to cost you something
because you are going to have to pay a management fee.
You know, it is a study I cited by Jason Fuhrman, that even
very small, even a .25 percentage point difference in rates of
return can, over a lifetime, diminish the amount of savings
by--final savings by as much as 10 percent.
Mr. Walburg. Significant impact, so.
Mr. Brannon. Yes.
Mr. Walburg. Yes. Well, thank you. I now recognize--I
recognize the Ranking Member of the Full Committee, Mr. Scott
from Virginia.
Mr. Scott. Thank you. Thank you, Mr. Chairman. Mr. Brannon,
you have talked about the average fees and returns. Do some ESG
funds charge lower fees than some non-ESG funds?
Mr. Brannon. Yes. In general, ESG fees charge more than the
typical index fund.
Mr. Scott. On average, are there some ESG funds that charge
less than some non-ESG funds?
Mr. Brannon. To my knowledge there are no--so, if you look
at TSP, which probably most of us participate in, if you have
an index fund at TSP it charges almost nothing. In fact, I
think it is now----
Mr. Scott. You found one low fund. There are no non-ESG
funds that charge more than any ESG funds?
Mr. Brannon. Sure. There are probably--there are some ESG
funds that charge less than some actively managed funds.
Mr. Scott. Okay. Do some ESG funds have higher historic
returns than some non-ESG funds?
Mr. Brannon. Yes.
Mr. Scott. Then why should the lower fee, higher return ESG
funds be excluded from plans where the higher fee, lower
returns be included?
Mr. Brannon. This gets back to the point I was talking
about with Chairman Walberg, is that if people are not making
active retirement decisions, and probably the majority of
people who enter into a retirement fund are not making an
active decision, right?
You are making some kind of default. You want that default
to be in something that is safe and is going to get the
highest, long-term rate of return, and that is where passively
managed funds enter in general.
Mr. Scott. You could have a higher fee actively managed
non-ESG fund as the default?
Mr. Brannon. It is possible, but that is not what
pensions----
Mr. Scott. It would be legal. If some do not want ESG
factors to be considered at all, if you are investing in a real
eState development, should it be illegal to consider
environmental factors, such as whether or not the development
will be under water in 20 years because of environmental
factors?
Mr. Brannon. I think that can be done, and is done, without
having to resort to the metrics in an ESG fund.
Mr. Scott. Well, you have to consider environmental
factors. Mr. Rees, are there studies about returns and fees on
ESG funds that you are aware of?
Mr. Rees. Yes, Congressman.
Mr. Scott. Can you tell us the results of some of those
studies?
Mr. Rees. Yes, so in my written testimony I cite a study
that reviewed over 2,000 academic papers, and it found that
only 10 percent found a negative relationship between ESG and
corporate financial performance. A majority of those studies
reviewed found positive findings.
If I may respond to Mr. Brannon's testimony, it is
misleading to compare actively managed ESG funds to index
funds. I would point out that the selection of index funds is,
and also effect, it can also take into consideration ESG
metrics.
I would point you to President Trump's Secretary of Labor,
Eugene Scalia, decision in 2020 when he ordered the Federal
Retirement Thrift Savings Investment Board to reverse his
decision to invest in an international stock index that
included Chinese equities.
In taking this action, presumably the Secretary did not
intend to subordinate the interest of Federal workers to the
non-pecuniary goal of national security. Now, does Congress
want to prohibit private sector retirement plans from making a
similar decision?
Mr. Scott. Can you discuss some of the high fee private
equity investments of cryptocurrency investments that have
higher fees than ESG funds?
Mr. Rees. Yes. It is deeply ironic that Republicans would
seek to prohibit actively managed ESG funds in retirement plans
and 401K plans at the exact same time that they are pushing for
expensive, risky, private equity investments to be permitted in
401K plans.
It is hypocritical, and it is not good retirement security
policy.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Walberg. I thank the gentleman, and I personally want
to wish you a happy birthday, and many more.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Walberg. I now recognize the Chairman Emeritus of this
Committee, as well as the Chair of the Rules Committee, Ms.
Foxx.
Mrs. Foxx. Thank you, Mr. Chairman, and happy birthday
Bobby. Thank you. I want to thank our witnesses for being here
today too. Mr. Crain, why were ERISA fiduciaries allowed to
delegate such critical decisions, such as Board selection and
policy decisions to proxy advisory firms that are not bound by
ERISA's duties of prudence and loyalty, and may instead promote
politically motivated ESG goals?
Mr. Crain. Thank you for that question. I think it goes
straight to the heart of the first Trump administration's DOL
Rule, and Chairman Allen's legislation. Proxy advisory firms
are conflicted; they are under regulated.
They have specific agendas that they utilize their voting
power to achieve, and it absolutely undermines ERISA
fiduciaries obligations if they are blindly outsourcing their
voting decisions to those proxy advisory firms.
Mrs. Foxx. Thank you. What transparency exists around the
criteria proxy advisory firms use to make voting
recommendations, and how do we know these criteria prioritize
fiduciary duty over ideological preferences?
Mr. Crain. Frankly, there is very little, if any at all,
transparency around how proxy advisory firms determine their
standards for public companies, and then how they make their
voting recommendations. In fact, the easiest way to find out is
to pay them a consulting fee if you are a public company, which
illustrates the clear conflicts of interest that they have.
Mrs. Foxx. Thank you. Professor Schanzenbach, given the
potential for lower returns from ESG investments, should
fiduciaries be required to explain to participants the long-
term financial consequences of these choices on their
retirement savings?
Mr. Schanzenbach. Well, I think I would have to distinguish
between whether they are using ESG factors to improve risk and
return, in which case they just have to continue to monitor
those chosen funds, or that chosen investment to make sure it
is fulfilling that promise. If it stops, it needs to drop the
investment.
If it is a non-pecuniary factor that is being used, I think
it is just basically prohibited under the duty of loyalty, and
then the only knife edge point is the question of this tie
breaker, which the bill still permits, so I hope that is
responsive.
Mrs. Foxx. If participants in ERISA plans are unwilling to
invest in ESG options, should they have the right to opt out of
these investments entirely, or are they effectively being
forced into supporting politically driven agendas with their
retirement savings?
Mr. Schanzenbach. Well, I think that is one of the
protective features of the duties of loyalty and care under
ERISA. You can think of the duty of loyalty as a process,
sorry, as a motive test. The fiduciary has to be offering this
option, or making the investment because it thinks it is in the
best financial--best pecuniary interests of the beneficiary.
Then the care issue arises as a process test, and they
follow a reasoned process, and have a reasoned explanation for
why they chose to offer that particular investment. Even if
they think for example, initially, that it is a tie, and they
can satisfy with the additional documentation, that it was in
fact a tie, which is I think something of a unicorn.
Assuming that they do that, they have to continue to
monitor that investment over time, and given that financial
factors, you know, the economy changes so rapidly, it is
unlikely to be a tie indefinitely, and so then they would have
to follow a process to remove it from the investment options,
or divest from the investment when they make that conclusion.
Mrs. Foxx. Thank you. Mr. Brannon, is it not misleading for
participants to be funneled into ESG investments through
brokerage windows without clear warnings that these choices are
not overseen by fiduciaries, and may harm their retirement
savings?
Mr. Brannon. I would say that any time people are not
making an active decision, and the money is just being put into
some kind of default, they should be made aware of what their
investments are going into, and the risk entailed, and whether
or not they are going into funds that might have a lower rate
of return.
Mrs. Foxx. Thank you. Thank you, Mr. Chairman, I yield
back.
Mr. Walberg. I thank the gentlelady. Now, I recognize the
gentleman from New York, Mr. Mannion.
Mr. Mannion. Thank you, Mr. Chairman. Today's hearing is
fundamentally about choice, about whether fiduciaries charged
with maximizing retirement security under ERISA can consider
all relevant information when making investment decisions.
Environmental, social and governance factors are not
ideological preferences. They are additional datapoints that
can impact the company's long-term performance.
I want to make one thing clear. Nobody here is suggesting a
mandate to prioritize ESG information over financial returns.
Simply permitting ESG considerations under ERISA is by no means
pushing an agenda, but arbitrarily restricting it is.
When we are talking about long-term investments, of course,
fiduciaries should be able to factor in things like climate
risks and unfair labor practices.
Frankly, the fact that we are having this hearing stems
from misconceptions, if not outright misrepresentations.
Meanwhile, the administration has spent the first 100 days
actively weakening retirement security, undermining faith in
Social Security and Medicare, sowing doubt in those very
systems, while imposing erratic tariff policies that have sent
401K balances tumbling.
If we are serious about protecting America's retirement, we
should start by holding the administration accountable. Mr.
Rees, could you please elaborate on how that accountability can
and should occur, including as it relates to congressional
oversight?
Mr. Rees. Yes, Congressman. It is vitally important that
Congress assert its Article I powers over the Federal budget to
restore funding for the Social Security Administration, and
rehiring our dedicated public servants, whose jobs are to
ensure that working people receive the Social Security benefits
that they have earned through a lifetime of hard work.
Mr. Mannion. Thank you. What do you make of these continued
discussions around ESG, considering the much larger issues that
we are currently facing as a country related to personal
financial security, retirement planning, and our economy in
general?
Mr. Rees. It is a distraction meant to distract us from
what is really happening, which is tax cuts for billionaires,
and cuts to the services that working people depend on in
government.
Mr. Mannion. Thank you so much. I yield back, Chairman.
Mr. Walberg. I thank the gentleman. I recognize the
gentlelady from Pennsylvania, Ms. Lee.
Ms. Lee. Thank you, Mr. Chairman. Proxy voting in
shareholder meetings is an issue of economic freedom and
worker's access. I do not usually often take that stance, but
in this particular instance it is undeniably true.
Prohibiting proxy voting in ERISA plans is a way of
shutting the boardroom doors to low-and middle-income
Americans, and marginalized folks, and locking these workers
out of a fair opportunity for financial freedom.
Shareholder meetings are of course where companies make the
big decisions, like whether to make a large acquisition, or who
should be on the company's board of directors, executive
compensation schedules, and other significant changes in
corporate operations or policies.
These decisions impact a company's bottom line, and if you
own a share, or a portion of a share of a company's stock, that
decision impacts your bottom line too. That is also true if you
are a stock shareholder through your work's retirement plan,
whether that be a 401K, qualified union pension plan, or
another ERISA covered plan.
Most working-class Americans who invest in stocks do so
through a retirement plan. If you have an employer-sponsored
retirement plan, that plan is managed on your behalf, so
historically the person that manages your employer or union
sponsored retirement plan, has been able to attend these
critical shareholder meetings, and vote on behalf of, and in
the best interest of the shareholders they represent.
This gives workers, working folks, a seat at the table to
ensure that their retirement money is protective. Mr. Rees,
could you please provide examples of instances when proxy
voting benefits participants and beneficiaries? Yes.
Mr. Rees. Thank you, Congresswoman. You are absolutely
right that proxy voting is vital to protecting the retirement
security of working families, and that is because CEOs do not
always get it right.
Ms. Lee. Really.
Mr. Rees. My counterpart, Mr. Crain, represents the
National Association of Manufacturers. As far as CEOs are
concerned, every time shareholders vote against the management,
the recommendations of corporate management, that is an error
or a wrong vote or was advised by a conflicted proxy voting
advisor.
It is just unacceptable that the Chairman's bill would
silence those working people's voices in the capital markets,
through their retirement plan by imposing burdensome red tape
prior to voting.
This bill requires fiduciaries to do an economic cost
benefit analysis prior to casting proxy votes. It is far
cheaper and simpler to just decide how you are going to vote. I
do not understand why the majority wants to disenfranchise
private sector retirement plans. It is unconstitutional, and it
is going to hurt the retirement security of working people as
you described.
Ms. Lee. Proxy voting clearly benefits plan participants
and beneficiaries, and as some of my colleagues have shown
today, that considering ESG corporate environments, social and
governance practices does too. When we talk about whether a
company should reinvest the 20-million-dollar profit into a
business, or the CEO's salary, that impacts workers retirement
money.
Mr. Rees, in your testimony you discuss how proxy voting is
really an issue of freedom. Congressional Republicans seemingly
want to put their thumb on the scale and limit the freedom of
retirement plan fiduciaries to consider ESG factors when making
investment and proxy voting decisions.
Would you please elaborate on that? Tell us about the
history of investment mandates.
Mr. Rees. Yes. The freedom for retirement plans to vote
proxies is an inherent part of our free market system in which
private actors decide how corporations are run. Investors,
including workers' retirement plans, make those decisions, not
the government, and not politicians.
Our State corporate laws assume that shareholders will be
voting proxies. If you do not vote proxies, if shareholders did
not vote proxies, directors would not be elected, executive
compensation plans would not be approved, mergers and corporate
transactions could not be approved, and shareholders would be
deprived from voting on environmental, social, and corporate
governance shareholder proposals.
That would hurt the retirement security of working people,
and it has more in common with the totalitarian command
economy, where the government controls how investors make
investments and cast proxy votes, than it does with the free
market system.
This rule that fiduciaries need to be voting proxies
consistent with the interest of retirement plan participants
and beneficiaries, not in the interest of corporate CEOs, as
represented by the National Association of Manufacturers, was
adopted by Ronald Reagan's Department of Labor.
Ronald Reagan, who defended the free market system, and yet
today the majority in this Congress seeks to silence those
private sector retirement plan votes, and their freedom to
invest.
Ms. Lee. Well, and I will let us end on that note because
time does fly, but I thank you so much for your testimony
today, and I yield back.
Mr. Walberg. I thank the gentlelady. I now recognize the
Ranking Member of this Subcommittee, Mr. DeSaulnier from
California.
Mr. DeSaulnier. Thank you, Mr. Chairman. Mr. Rees, I have
mentioned in my opening comments about the analysis that you
see that the cuts to Medicaid based on what CBO, and I will add
in a previous hearing of this Subcommittee, the Chairman and I
got into a little disagreement about what the budget, and what
will actually happen and is happening in Energy and Commerce
right now.
The cuts to Medicaid that I quoted also from the Kaiser
Family Foundation analysis of the effect on worker's benefits,
and specifically healthcare. 65 percent of people who receive
Medicaid of working age are working full-time, another 20
percent work part-time. Of the remaining 15 percent, almost 10
percent are caregivers for family members.
What does that kind of cut in addition as we are talking
about, protecting benefits and real information, how does that
have downstream effects, and lose 220,000 jobs in California,
according to the analysis by the University of California.
What is the downstream effect on the cuts to Medicaid if
E&C does not identify how they will protect that as some of my
colleagues have promised that they will?
Mr. Rees. Thank you for the question, Congressman. As a
Berkeley alumni, let me first say Go Bears. Over 70 million
working people in the United States are enrolled in Medicaid.
Cutting this vital program will leave millions uninsured.
Being uninsured means foregoing preventative health, and
increasing medical debts, which is the leading cause of
personal bankruptcy in the United States.
Moreover, these cuts will push healthcare costs from the
uninsured onto health and welfare plans in the form of
increased hospital costs from uncompensated care. Nearly one-
fifth of all hospital revenue comes from Medicaid, and the loss
of this revenue will be passed on to insured patients.
It is simply unconscionable in my view that these cuts will
be made just to pay for tax cuts for billionaires.
Mr. DeSaulnier. To followup on that, these people are
working, so for adding required paperwork and bureaucracy for
them to prove that they are working to get Medicaid. I remember
in California when I was Chair of the Labor Committee, we got
in a disagreement with the Schwarzenegger administration where
they were saying there is so much fraud in support system basic
needs.
The LAO came back and said you are spending more money on
preventing fraud than we have identified in fraud. This seems
like a similar situation where the majority is suggesting all
this paperwork and bureaucracy to prove that you are working,
when we already know they are working in order for them to
continue to get Medicaid.
Mr. Rees. That is right, Congressman. It is essentially an
effort to deprive working people of access to health insurance,
and that is going to hurt not just working people, it is going
to hurt our economy as whole, as our working age population is
less healthy being deprived from preventative care, and also
creating tremendous economic uncertainty for working families
who are faced by crushing medical debt.
Mr. DeSaulnier. That is on top of the hearings we have had
in this Committee about the erosion of employer/employee
healthcare plans, where the number of denials on usually
accepted claims has gone way up in the last 5 years. Let us
talk a little bit about Social Security.
If we cut Social Security staff, the people who are at
working age who are supplementing, and we know this has grown
in this country, older Americans have to work, so how does that
affect, if you cannot get through to Social Security, the
retirement system, and people who are working but are eligible
for Social Security?
Mr. Rees. Well, it is a benefit cut. It is a cut. If you
are unable to get your promised Social Security benefits
because Elon Musk's DOGE has cut the Social Security
Administration employment, that is going to affect our economy
as a whole. It is also going to affect the retirement security
of working people.
More than half of working people in this country do not
have a retirement plan. They do not have an individual
retirement account. They depend exclusively on Social Security
in order to provide for secure retirement after a lifetime of
hard work.
For us to be talking about cutting the Social Security
Administration, as is currently happening under President
Trump, is going to create a deep hole for working people, who
are being deprived from their hard-earned Social Security
benefits.
Mr. DeSaulnier. We were talking about information right
now, so people can get a reasonable expression of analysis,
whether it is by the right or the left about investments. Jamie
Dimon, as I mentioned, said that this administration's policy
on tariffs will increase inflation, is more likely to add a
recession. Can you briefly comment on that?
Mr. Rees. Yes. President Trump's Liberation Day tariff
announcement, it effectively liberated 6 trillion dollars in
stock market valuation, including from millions of working
people's retirement accounts.
Mr. DeSaulnier. Thank you. I yield back.
Chairman Allen. Okay. Thank you, again, to all of our
witnesses for their testimony. I believe we have wrapped up
questioning now, and I will ask the Ranking Member, do you have
a closing statement?
Mr. DeSaulnier. I do, Mr. Chairman. I want to thank the
witnesses again, and just say there should be nothing
controversial about ensuring retirement plan fiduciaries are
permitted to consider ESG factors, just like they appropriately
weigh the other risks and benefits for investments.
At a minimum, Congress should not put its thumb on the
scale, and disenfranchise retirement plan fiduciaries from
considering ESG factors, or voting proxies. They are not. House
republicans are bound by law to make prudent investments for
plan participants.
Mr. Chairman, I ask unanimous consent to enter into the
record the following items, a report by the Shareholder Rights
Group entitled Shareholder Proposals, An Essential Investor
Right.
Chairman Allen. Without objection.
[The information of Mr. DeSaulnier follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. DeSaulnier. No. 2, the Wall Street Journal article I
mentioned entitled, DOW Headed for Worst April since 1932, as
Investors Send No Confidence Signal.
Chairman Allen. Without objection.
[The information of Mr. DeSaulnier follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. DeSaulnier. Actually, No. 3, BlackRock's comment later
expressing support for ESG investing.
Chairman Allen. Without objection.
[The information of Mr. DeSaulnier follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. DeSaulnier. Thank you. A report from the Joint Economic
Committee Democrats entitled Trump's Tariff Plans Would Drive
Up Costs for Families and Shrink the Economy.
Chairman Allen. Without objection.
[The information of Mr. DeSaulnier follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. DeSaulnier. Last, a statement on today's hearing from
the Americans for Financial Reform Education Fund.
Chairman Allen. Without objection.
[The information of Mr. DeSaulnier follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. DeSaulnier. I want to thank the Chair. Mr. Chairman, we
are 100 days into this new administration, and workers and
families in the district I represent, and around the country
are tired of the chaos and turmoil and the thoughtless policy.
The President's reckless tariffs are destabilizing financial
markets, raising prices, and threatening a recession.
Social Security is under siege, and the House Republicans
are plowing forward with their plan to cut taxes for the rich,
and pay for it by making college more expensive, and gutting
Medicaid. That is not progress, and we can do better. We are
better than this. I yield back.
Chairman Allen. I thank the Ranking Member for your closing
statement, and again, I want to thank the witnesses for your
testimony. Obviously, you know, we have brought up a lot of
interest in, you know, what the administration is trying to do
here. I will note that at Election Date in November 2024, the
national debt had increased for that year to date 2.35 trillion
dollars.
I will also note that during the previous administration, 8
trillion dollars was spent and added to this economy, borrowed
funds. That does not include the other dollars that were spent
and doled out to consumers to buy products and what not, to I
guess shore up the economy.
As of today, the debt to date is about 1.6 trillion, and
we, you know, by my calculation, that is a savings of about 600
billion dollars. Anybody in this room that thinks that we can
sustain that, I would like to have a solution. It is
impossible. 37 trillion in debt. Now, you know, we all need to
take responsibility for that, okay? I am not passing the torch
one way or the other.
Something has got to be done. The other thing is we are
running trillion-dollar trade deficits, trillion dollars. That
is money going right out the door. We are enriching other
countries. If you look at the trade situation, are we okay with
them charging us multiple tariffs, and they can do business
here at will?
You know, again, somebody has got to take this on. We can
talk about the implications and everything else, but it has got
to be fixed because it is unsustainable. Wealth is pouring out
of this country, and it must stop because ,yes, our retirement
is at risk.
Now, what is going to be interesting is right now we are in
transition. This economy is in transition from a government
funded GDP, to a privately funded GDP. There was a war on oil
and gas. We have now unleashed oil and gas. It is going to take
more than 100 days for those guys to crank up and get with it
because just 6 years ago we had the greatest economy in the
history of our lifetime.
This administration, the current administration, was able
to pull that off. You know, we can talk about this right now,
but again, you know, these things have to be addressed, along
with what we are talking about here as far as retirement and
the future of America. It needs to be an all-in cumulative
effort to make this happen.
You know, you have got to reduce--we have got to balance
this budget, and we have got to pay this debt off because we
cannot continue to put this burden on the future of our
children and grandchildren. It is clear, a good man leaves an
inheritance for his children's children, and I am just glad to
be a part of it.
I am glad to be able to work with my great colleagues here,
as we look to solutions to make this happen. A big part of that
is retirement plans, ERISA, and I want to thank our witnesses
for your expert testimony today. The Biden administration ESG
Rule ignores the current law and judicial precedent.
Under ERISA, a retirement plan fiduciary must act solely in
the interest of the participants and beneficiaries, and for the
exclusive purpose of providing benefits to participants and
their beneficiaries and defraying reasonable expenses.
Republicans are committed to protecting the retirement
savings of workers, retirees, and their families. I look
forward to continuing to work with all members of the Committee
on providing American workers a secure retirement. With that,
this hearing is adjourned.
[Whereupon, at 11:48 a.m., the Subcommittee on Health,
Employment, Labor, and Pensions was adjourned.]