[Congressional Record Volume 170, Number 145 (Wednesday, September 18, 2024)]
[House]
[Pages H5343-H5350]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ROLL BACK ESG TO INCREASE RETIREMENT EARNINGS ACT
Ms. FOXX. Mr. Speaker, pursuant to House Resolution 1455, I call up
the bill (H.R. 5339) to amend the Employee Retirement Income Security
Act of 1974 to specify requirements concerning the consideration of
pecuniary and non-pecuniary factors, and for other purposes, and ask
for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Smith of Nebraska). Pursuant to House
Resolution 1455, in lieu of the amendment in the nature of a substitute
recommended by the Committee on Education and the Workforce, printed in
the bill, an amendment in the nature of a substitute consisting of the
text of Rules Committee Print 118-50 shall be considered as adopted and
the bill, as amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 5339
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Protecting
Americans' Investments from Woke Policies Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
DIVISION A--ROLL BACK ESG TO INCREASE RETIREMENT EARNINGS
Sec. 1001. Short title.
Sec. 1002. Limitation on consideration of non-pecuniary factors by
fiduciaries.
DIVISION B--NO DISCRIMINATION IN MY BENEFITS
Sec. 2001. Short title.
Sec. 2002. Service provider selection.
DIVISION C--RETIREMENT PROXY PROTECTION
Sec. 3001. Short title.
Sec. 3002. Exercise of shareholder rights.
DIVISION D--PROVIDING COMPLETE INFORMATION TO RETIREMENT INVESTORS
Sec. 4001. Short title.
Sec. 4002. Brokerage window disclosures.
DIVISION A--ROLL BACK ESG TO INCREASE RETIREMENT EARNINGS
SEC. 1001. SHORT TITLE.
This division may be cited as the ``Roll back ESG To
Increase Retirement Earnings Act'' or the ``RETIRE Act''.
SEC. 1002. LIMITATION ON CONSIDERATION OF NON-PECUNIARY
FACTORS BY FIDUCIARIES.
(a) In General.--Section 404(a) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104(a)) is amended by
adding at the end the following:
``(3) Interest based on pecuniary factors.--
``(A) In general.--For purposes of paragraph (1), a
fiduciary shall be considered to act solely in the interest
of the participants and beneficiaries of the plan with
respect to an investment or investment course of action only
if the fiduciary's action with respect to such investment or
investment course of action is based only on pecuniary
factors (except as provided in subparagraph (B)). The
fiduciary may not subordinate the interests of the
participants and beneficiaries in their retirement income or
financial benefits under the plan to other objectives and may
not sacrifice investment return or take on additional
investment risk to promote non-pecuniary benefits or goals.
The weight given to any pecuniary factor by a fiduciary shall
reflect a prudent assessment of the impact of such factor on
risk and return.
``(B) Use of non-pecuniary factors for investment
alternatives.--Notwithstanding paragraph (A), if a fiduciary
is unable to distinguish between or among investment
alternatives or investment courses of action on the basis of
pecuniary factors alone, the fiduciary may use non-pecuniary
factors as the deciding factor if the fiduciary documents--
``(i) why pecuniary factors were not sufficient to select a
plan investment or investment course of action;
``(ii) how the selected investment compares to the
alternative investments with regard to the composition of the
portfolio with regard to diversification, the liquidity and
current return of the portfolio relative to the anticipated
cash flow requirements of the plan, and the projected return
of the portfolio relative to the funding objectives of the
plan; and
``(iii) how the selected non-pecuniary factor or factors
are consistent with the interests of the participants and
beneficiaries in their retirement income or financial
benefits under the plan.
``(C) Investment alternatives for participant-directed
individual account plans.--In selecting or retaining
investment options for a
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pension plan described in subsection (c)(1)(A), a fiduciary
is not prohibited from considering, selecting, or retaining
an investment option on the basis that such investment option
promotes, seeks, or supports one or more non-pecuniary
benefits or goals, if--
``(i) the fiduciary satisfies the requirements of paragraph
(1) and subparagraphs (A) and (B) of this paragraph in
selecting or retaining any such investment option; and
``(ii) such investment option is not added or retained as,
or included as a component of, a default investment under
subsection (c)(5) (or any other default investment
alternative) if its investment objectives or goals or its
principal investment strategies include, consider, or
indicate the use of one or more non-pecuniary factors.
``(D) Definitions.--For the purposes of this paragraph:
``(i) The term `pecuniary factor' means a factor that a
fiduciary prudently determines is expected to have a material
effect on the risk or return of an investment based on
appropriate investment horizons consistent with the plan's
investment objectives and the funding policy established
pursuant to section 402(b)(1).
``(ii) The term `investment course of action' means any
series or program of investments or actions related to a
fiduciary's performance of the fiduciary's investment duties,
and includes the selection of an investment fund as a plan
investment, or in the case of an individual account plan, a
designated investment alternative under the plan.''.
(b) Effective Date.--The amendments made by this section
shall apply to actions taken by a fiduciary on or after the
date that is 12 months after the date of enactment of this
Act.
DIVISION B--NO DISCRIMINATION IN MY BENEFITS
SEC. 2001. SHORT TITLE.
This division may be cited as the ``No Discrimination in My
Benefits Act''.
SEC. 2002. SERVICE PROVIDER SELECTION.
Section 404(a)(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1104(a)(1)) is amended--
(1) in subparagraph (C), by striking ``and'';
(2) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(E) by selecting, monitoring, and retaining any
fiduciary, counsel, employee, or service provider of the
plan--
``(i) in accordance with subparagraphs (A) and (B); and
``(ii) without regard to race, color, religion, sex, or
national origin.''.
DIVISION C--RETIREMENT PROXY PROTECTION
SEC. 3001. SHORT TITLE.
This division may be cited as the ``Retirement Proxy
Protection Act''.
SEC. 3002. EXERCISE OF SHAREHOLDER RIGHTS.
(a) In General.--Section 404 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104) is amended by
adding at the end the following new subsection:
``(f) Exercise of Shareholder Rights.--
``(1) Authority to exercise shareholder rights.--
``(A) In general.--The fiduciary duty to manage plan assets
that are shares of stock includes the management of
shareholder rights appurtenant to those shares, including the
right to vote proxies. When deciding whether to exercise a
shareholder right and in exercising such right, including the
voting of proxies, a fiduciary must act prudently and solely
in the interests of participants and beneficiaries and for
the exclusive purpose of providing benefits to participants
and beneficiaries and defraying the reasonable expenses of
administering the plan. The fiduciary duty to manage
shareholder rights appurtenant to shares of stock does not
require the voting of every proxy or the exercise of every
shareholder right.
``(B) Exception.--This subsection shall not apply to
voting, tender, and similar rights with respect to securities
that are passed through pursuant to the terms of an
individual account plan to participants and beneficiaries
with accounts holding such securities.
``(2) Requirements for exercise of shareholder rights.--A
fiduciary, when deciding whether to exercise a shareholder
right and when exercising a shareholder right--
``(A) shall--
``(i) act solely in accordance with the economic interest
of the plan and its participants and beneficiaries;
``(ii) consider any costs involved;
``(iii) evaluate material facts that form the basis for any
particular proxy vote or exercise of shareholder rights; and
``(iv) maintain a record of any proxy vote, proxy voting
activity, or other exercise of a shareholder right, including
any attempt to influence management; and
``(B) shall not subordinate the interests of participants
and beneficiaries in their retirement income or financial
benefits under the plan to any non-pecuniary objective, or
promote non-pecuniary benefits or goals unrelated to those
financial interests of the plan's participants and
beneficiaries.
``(3) Monitoring.--A fiduciary shall exercise prudence and
diligence in the selection and monitoring of a person, if
any, selected to advise or otherwise assist with the exercise
of shareholder rights, including by providing research and
analysis, recommendations on exercise of proxy voting or
other shareholder rights, administrative services with
respect to voting proxies, and recordkeeping and reporting
services.
``(4) Investment managers and proxy advisory firms.--Where
the authority to vote proxies or exercise other shareholder
rights has been delegated to an investment manager pursuant
to section 403(a), or a proxy voting advisory firm or other
person who performs advisory services as to the voting of
proxies or the exercise of other shareholder rights, a
responsible plan fiduciary shall prudently monitor the proxy
voting activities of such investment manager or advisory firm
and determine whether such activities are in compliance with
paragraphs (1) and (2).
``(5) Voting policies.--
``(A) In general.--In deciding whether to vote a proxy
pursuant to this subsection, the plan fiduciary may adopt a
proxy voting policy, including a safe harbor proxy voting
policy described in subparagraph (B), providing that the
authority to vote a proxy shall be exercised pursuant to
specific parameters designed to serve the economic interest
of the plan.
``(B) Safe harbor voting policy.--With respect to a
decision not to vote a proxy, a fiduciary shall satisfy the
fiduciary responsibilities under this subsection if such
fiduciary adopts and is following a safe harbor proxy voting
policy that--
``(i) limits voting resources to particular types of
proposals that the fiduciary has prudently determined are
substantially related to the business activities of the
issuer or are expected to have a material effect on the value
of the plan investment; or
``(ii) establishes that the fiduciary will refrain from
voting on proposals or particular types of proposals when the
assets of a plan invested in the issuer relative to the total
assets of such plan are below 5 percent (or, in the event
such assets are under management, when the assets under
management invested in the issuer are below 5 percent of the
total assets under management).
``(C) Exception.--No proxy voting policy adopted pursuant
to this paragraph shall preclude a fiduciary from submitting
a proxy vote when the fiduciary determines that the matter
being voted on is expected to have a material economic effect
on the investment performance of a plan's portfolio (or the
investment performance of assets under management in the case
of an investment manager); provided, however, that in all
cases compliance with a safe harbor voting policy shall be
presumed to satisfy fiduciary responsibilities with respect
to decisions not to vote.
``(6) Review.--A fiduciary shall periodically review any
policy adopted under this subsection.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to an exercise of shareholder rights occurring on
or after January 1, 2024.
DIVISION D--PROVIDING COMPLETE INFORMATION TO RETIREMENT INVESTORS
SEC. 4001. SHORT TITLE.
This division may be cited as the ``Providing Complete
Information to Retirement Investors Act''.
SEC. 4002. BROKERAGE WINDOW DISCLOSURES.
(a) In General.--Section 404(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104(c)) is amended by
adding at the end the following new paragraph:
``(7) Notice requirements for brokerage windows.--
``(A) In general.--In the case of a pension plan which
provides for individual accounts and which provides a
participant or beneficiary the opportunity to choose from
designated investment alternatives, a participant or
beneficiary shall not be treated as exercising control over
assets in the account of the participant or beneficiary
unless, with respect to any investment arrangement that is
not a designated investment alternative, each time before
such a participant or beneficiary directs an investment into,
out of, or within such investment arrangement, such
participant is notified of, and acknowledges, each element of
the notice described under paragraph (B).
``(B) Notice.--The notice described under this paragraph is
a four part information that is substantially similar to the
following information:
``1. Your retirement plan offers designated investment alternatives
prudently selected and monitored by fiduciaries for the purpose of
enabling you to construct an appropriate retirement savings portfolio.
In selecting and monitoring designated investment alternatives, your
plan's fiduciary considers the risk of loss and the opportunity for
gain (or other return) compared with reasonably available investment
alternatives.
2. The investments available through this investment arrangement are not
designated investment alternatives, and have not been prudently
selected and are not monitored by a plan fiduciary.
3. Depending on the investments you select through this investment
arrangement, you may experience diminished returns, higher fees, and
higher risk than if you select from the plan's designated investment
alternatives.
4. The following is a hypothetical illustration of the impact of return
at 4 percent, 6 percent, and 8 percent on your account balance
projected to age 67.
``(C) Illustration.--The notice described under paragraph
(B) shall also include a graph displaying the projected
retirement balances of such participant or beneficiary at age
67 if the account of such individual were to achieve an
annual return equal to each of the following:
``(i) 4 percent.
``(ii) 6 percent.
``(iii) 8 percent.''.
(b) Designated Investment Alternative Defined.--Section 3
of such Act (29 U.S.C. 1002) is amended by adding at the end
the following new paragraph:
``(46) Designated investment alternative.--
[[Page H5345]]
``(A) In general.--The term `designated investment
alternative' means any investment alternative designated by a
responsible fiduciary of an individual account plan described
in subsection 404(c) into which participants and
beneficiaries may direct the investment of assets held in, or
contributed to, their individual accounts.
``(B) Exception.--The term `designated investment
alternative' does not include brokerage windows, self-
directed brokerage accounts, or similar plan arrangements
that enable participants and beneficiaries to select
investments beyond those designated by a responsible plan
fiduciary.''.
(c) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2025.
The SPEAKER pro tempore. The bill, as amended, shall be debatable for
1 hour, equally divided and controlled by the chair and ranking
minority member of the Committee on Education and the Workforce, or
their respective designees.
The gentlewoman from North Carolina (Ms. Foxx) and the gentleman from
Virginia (Mr. Scott) each will control 30 minutes.
The Chair recognizes the gentlewoman from North Carolina (Ms. Foxx).
General Leave
Ms. FOXX. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
to insert extraneous material under H.R. 5339.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from North Carolina?
There was no objection.
Ms. FOXX. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in full support of the Republican fight
against the woke, progressive agenda.
The Committee on Education and the Workforce is proud to lead debate
on the Protecting Americans' Investments from Woke Policies Act, or
H.R. 5339, a bill that would confront and dispatch one of the most
nefarious and hidden forms of wokeness.
Wokeness comes in all shapes and sizes. It is a problem when it is
pushed at your local public school. It is an existential threat to the
country when it is pushed by the institutions that police how we think,
what we say, and where our money goes.
Wokeness destroys everything it touches, including the value-neutral
institutions that America used to take for granted.
First, wokeness conquered academia. Then, it conquered the media. The
final frontier of the woke mind virus is the banks and capitalism
itself.
You may say, what? Banks are woke? They are driven by things like
profit motive and the markets. Well, we need to think again.
Under the guise of a practice known as environmental, social, and
governance investing, or ESG for short, banks are responsible for woke
social engineering on a scale that history's authoritarians could only
dream of.
In essence, a big bank or asset manager will take your hard-earned
pension or 401(k) and invest it in radical, progressive causes. These
ESG funds exclude businesses deemed insufficiently woke.
What may disqualify a company from receiving woke capital is
including, but not limited to, too many White, straight men on the
board, too much profit in the oil and gas industry, or too many
politically incorrect takes by your CEO on X, formerly known as
Twitter.
That the S&P 500's ESG index delisted a green company like Tesla only
proves the point that ESG is nothing but a woke power grab.
Concerns about the environment are secondary to enforcing bland,
progressive conformity. What is more, ESG factors guide about one-
fourth of all assets under management, or $30 trillion.
{time} 1430
Yet, these funds underperformed when compared to their conventional
peers. Take this from the Financial Times: ``Over the past 12 months,
global sustainable equity funds made an 11 percent return, compared
with 21 percent for conventional stock funds, according to a May report
from JPMorgan.''
Sacrificing pensions and retirement income for woke impact should be
illegal. This legislation makes it clear that other people's retirement
income may not be sacrificed for woke impact.
Pensioners forged the infrastructure that powers modern American
cities. Pensioners built the industries that make America great.
Pensioners put their life and work into this country, and they don't
want their hard-earned nest egg deflating because its principal is
serving political causes.
I especially thank Representative Allen from Georgia, Representative
Houchin from Indiana, Representative Good from Virginia, and
Representative Banks from Indiana for leading this charge on behalf of
pensioners and retirees.
The Protecting Americans' Investments from Woke Policies Act is a
product of their hard work, and it is the necessary first step toward
making ESG investing illegal under certain retirement plans.
Mr. Speaker, I urge a ``yes'' vote on H.R. 5339 and reserve the
balance of my time.
Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in opposition to H.R. 5339, the so-called
Protecting Americans' Investments from Woke Policies Act.
This bill packages four separate bills that the Committee on
Education and the Workforce reported on party line votes.
H.R. 5339 relates to what is known as environmental, social, and
governance or ESG investing. Many of us believe that workers should be
able to invest in a way that reflects their values, whether combating
climate change or promoting health and labor standards, without
sacrificing investment returns.
To be clear, this kind of investing is not at odds with making a
profit. In fact, it makes good financial sense to carefully consider
investments that account for a company's exposure to such liabilities
as high liability risks, fossil-fuel-dependent business practices, or
vulnerability to sea level rise, like whether or not an asset is going
to be underwater in 15 years. It would be nice to know that, but you
shouldn't be prohibited from even considering it. These are among the
factors that could cause a stock to suffer over the long-term horizon.
Considering that workers often contribute to their retirement accounts
for decades before drawing down their savings, it makes perfectly good
sense for those managing the workers' accounts to consider long-term
impacts when making investment decisions.
ESG investment is a sound, profit-centered, risk mitigation strategy,
and the financial services industry recognizes it.
For example, State Street Global Advisors, one of the largest asset
managers, noted that, as a fiduciary, they have ``a duty to act
prudently and in the best interest of our clients, which increasingly
includes consideration of environmental, social, and governance factors
relevant to the performance of the companies in which our clients
invest.''
The Trump administration issued a rule that imposed needless barriers
and onerous requirements related to ESG investing. Fortunately, the
Biden-Harris administration reversed course and finalized a sensible
rule clarifying that a plan's fiduciaries may consider ESG factors when
they make decisions for retirement plan participants. Let's be clear,
the rule is not a mandate.
H.R. 5339 codifies the Trump-era ESG rule. It also codifies the
Trump-era rule that would disenfranchise plan fiduciaries from
exercising their shareholder rights on behalf of workers.
The bill also undermines efforts to increase diversity among asset
managers. This is a worthwhile endeavor, as the GAO noted a few years
ago that only 1 percent of the $7 trillion in global assets under
management are managed by firms owned by women or people of color.
There is also research to suggest that nondiverse firms do not
outperform diverse firms across all asset classes.
In sum, H.R. 5339 takes us backwards and undercuts retirement
professionals who are legally bound to make prudent decisions for
workers and retirees.
Mr. Speaker, I urge opposition to the bill and reserve the balance of
my time.
Ms. FOXX. Mr. Speaker, I yield 3 minutes to the gentleman from
Georgia (Mr. Allen).
[[Page H5346]]
Mr. ALLEN. Mr. Speaker, I thank the gentlewoman from North Carolina
for yielding the time.
I rise in support of my bill, H.R. 5339, the Protecting Americans'
Investments from Woke Policies Act. The Committee on Education and the
Workforce worked diligently this Congress to hold the Biden
administration accountable for their destructive policies that only
serve to harm American families, workers, and retirees.
That is why I proudly partnered with many of my committee colleagues
to put together this package of bills before us today that stops this
administration's assault on the retirement security of millions of
Americans.
Saving for retirement has become increasingly difficult as prices
continue to skyrocket. Over the last 3\1/2\ years, we have witnessed a
sharp rise in the cost of basic necessities, putting a significant
strain on household budgets.
The average household in Georgia is paying over $1,000 per month to
purchase the same goods and services as in January of 2021.
Cumulatively, the average Georgia household has spent over $27,000 more
due to inflation in that same timeframe.
As a result of the Biden-Harris administration's out-of-control
spending policies, inflation is soaring. Many seniors are living
paycheck to paycheck, retirement savings are in jeopardy, and
hardworking Americans are struggling to secure their financial future.
One example of how the Biden administration is jeopardizing
retirement savings is through a Department of Labor rule that allows
financial advisors to ignore their responsibility to prioritize
financial returns in favor of investing America's retirement savings
into risky, climate-related environmental, social, and governance, or
ESG, funds. Now, let's be clear. This mandate came from the Department
of Labor. It did not come from the financial investment community.
ESG funds are proven to carry higher risk and charge steeper fees,
and financial institutions have become more brazen in professing
partisan and ideological preferences while investing Americans' hard-
earned retirement savings.
As families continue to struggle to afford basic necessities like gas
and groceries due to record inflation, the last thing hardworking
taxpayers need is for their retirement savings to be depleted due to
politically motivated mismanagement.
That is why I was proud to introduce the Roll back ESG To Increase
Retirement Earnings, the RETIRE Act. This bill rolls back this
overreaching rule and ensures ERISA retirement plan sponsors prioritize
financial returns over ESG factors when making investment decisions on
behalf of their clients, as mandated by the Department of Labor.
My RETIRE Act makes clear what ERISA intended. Retirement plan
sponsors should invest their clients' hard-earned money in a manner
that maximizes financial returns and minimizes risk, period.
We must get back to a point where financial institutions make
investment decisions based on standards of return, credit, collateral,
raw data, and balance sheet numbers. We can do so by passing today's
legislation.
Mr. Speaker, I strongly urge a ``yes'' vote on H.R. 5339.
Ms. MANNING. Mr. Speaker, I yield 2 minutes to the gentleman from
Rhode Island (Mr. Magaziner), my good friend.
Mr. MAGAZINER. Mr. Speaker, I thank the gentlewoman from North
Carolina for yielding.
I rise in opposition to H.R. 5339, a misguided bill that will hurt
the retirement savings of millions of hardworking Americans.
The evidence is clear. Companies that adopt thoughtful policies to
manage their environmental risks, their social risks, and have sound
corporate governance policies outperform those that don't.
As a former State treasurer and an investor in the private sector, I
can tell you that companies that take steps to mitigate their
environmental footprint to do right by their customers, to do right by
their employees, and to promote corporate diversity tend to outperform
their peers. Any investor who knows what they are doing would be
foolish to ignore those factors.
Even if you disagree with me, even if you don't think that those
factors matter in company performance, you ought to believe that in a
free market, investors should have the right to consider whatever
factors they believe are relevant to performance without Congress
getting in the way.
Why is the Republican majority, which claims to be the party of small
government, so obsessed with walking away from free markets and taking
away Americans' freedoms?
This is yet another example of this trend.
House Republicans want to tell you what books you can and can't get
from the library, who you are and aren't allowed to marry, what
reproductive healthcare decisions women have the right to make, and now
they want to try to make it illegal for investors to even think about a
company's environmental or social performance when doing their jobs.
The people who are going to get hurt are the American workers whose
retirement savings will take a hit if this bill takes effect.
By the way, no one is asking for this bill. There are no constituents
back home who are saying, you know, the biggest problem in our country
today is ESG investing.
How about my Republican colleagues do their job, focus on keeping the
government funded and open, and not take away the freedom of investors
to do their jobs the way they see fit?
Ms. FOXX. Mr. Speaker, I yield myself such time as I may consume. My
colleagues on the other side of the aisle have made many claims about
the supposed advantages of ESG, just now saying that ESG funds tend to
do better.
Well, let me set the record straight. ESG funds have underperformed
for years. According to a Bloomberg report, the 10 largest ESG funds
posted double-digit losses in 2022, and 8 of the 10 performed worse
than the S&P 500.
It is no surprise that in 2023, according to The New York Times,
investors pulled $13 billion out of ESG funds.
Another study from Boston University found there is little reason to
infer that ESG criteria is reliable for predicting stock returns. I
think it is really important to set the record straight.
To make matters worse, ESG products charge higher fees to
participants than traditional investment funds, which can significantly
reduce participants' retirement savings over time.
Finally, according to researchers at George Mason University, ESG
funds expose workers and retirees to additional investment risk.
Increased costs, increased risk, and lackluster returns make for a
bad cocktail. Weakening the investment portfolios is not what we should
be doing here.
I yield 3 minutes to the gentleman from Virginia (Mr. Good).
Mr. GOOD of Virginia. Mr. Speaker, as the chair said, if ESG funds
performed better, investors would choose those based on their
performance, not because they are ESG compliant.
Mr. Speaker, I support passage of 5339. This legislation will protect
Americans' retirement savings from the left's woke agenda.
On day one, the Biden administration pursued a radical agenda focused
on so-called diversity and equity instead of truly helping everyday
Americans.
This agenda infiltrates every sector of our society under the Biden
administration, including the way people invest their hard-earned
money.
For decades, Federal law has required fiduciaries, or those we trust
to invest on our behalf, to adhere to principles of prudence and
loyalty to the investors' best interests.
The prudence and loyalty of the fiduciary to the investor protects
the American public. Now the Biden administration has decided these
principles are no longer the primary concern.
No, under Biden-Harris, your best interest is not the main priority.
Investments must now meet certain radical and environmental standards
and support the left's equity agenda.
This could mean investing in a solar energy company and overlooking
an oil or a gas stock that might be a better financial investment.
It might mean that the company overseeing your portfolio needs to
adhere to DEI practices and hire people because they look a certain
way, not because they are the most qualified. This is called ESG
investing, and, of course, this is wrong.
[[Page H5347]]
The bill today includes one of my bills, No Discrimination in my
Benefits Act, which amends the law to say that any fiduciary must be
selected without regard to race, color, religion, sex, or national
origin.
Adding this language will preserve the merit-based standard that
Americans expect employers to use when hiring.
Instead of addressing the state of the economy, which would be a much
better way to ensure that individual retirement plans are doing well,
Democrats double down on DEI and believe, or at least claim to believe,
that a lack of diversity is why your pension or your 401K isn't getting
the rate of return you expected. They, of course, don't want to blame
the Biden-Harris economy.
{time} 1445
For example, Senate Democrats actually sent a letter to 25 companies
requesting information about the gender and race, the DEI makeup, of
the asset managers of their pension plans. The letter voiced concern
over the problem of White men dominating the industry and demanded
answers from the companies on their plans to diversify their employees
based on sex and race rather than their skills and expertise.
The American people don't care about the diversity makeup of someone
who is flying a plane or who is performing surgery on them, and they
don't want it with respect to the management of their life savings, but
the Democratic Party wants to force companies to make decisions in
direct contradiction to the longstanding Civil Rights Act, which they
claim to support.
Using someone's race or sex to determine their eligibility for a
position is wrong, and civil rights law agrees, even if the Democratic
Party does not.
Hardworking Americans want the most competent and knowledgeable
person to manage their benefits. They want to know their assets are
safe and they will have a good return on investment.
The ESG investing agenda is in direct opposition to this, so I urge
passage of H.R. 5339.
Ms. MANNING. Madam Speaker, I yield 3 minutes to the gentleman from
Michigan (Mr. Kildee), my friend.
Mr. KILDEE. Madam Speaker, the bill before us is really nothing more
than a distraction, a distraction from the real issues facing American
seniors and retirees. What seniors want is their government to lower
the cost of everyday necessities like groceries, gas, water, and
electric bills. They want their hard-earned savings protected. They
don't want Congress dictating to them where and how to invest for their
retirement.
If Republicans were truly serious about protecting American retirees,
they would be working to restore the pensions of Americans who have
lost their retirements, their pensions or seen them cut, like the
thousands of Delphi salaried retirees across the country.
Americans who work their whole lives should not have to worry if they
will be able to retire in dignity, but when General Motors filed for
bankruptcy during the Great Recession, the U.S. Pension Benefit
Guaranty Corporation, the PBGC, unfairly cut retirement benefits by as
much as 70 percent for more than 20,000 Delphi salaried retirees.
These cuts have been devastating for these retirees. We have heard
stories from Delphi salaried retirees facing extreme hardship, even
forgoing medical treatment because their pensions were slashed so much.
Under the past administration, the former President made a promise
that he would fix this issue. He did not. He didn't even try.
Last Congress, under the leadership of Speaker Pelosi and Democrats,
this body passed my legislation, the Susan Muffley Act, to be clear, in
a bipartisan fashion, to restore the pensions of thousands of Delphi
workers--as I said, a bipartisan bill that would restore those
pensions. We had 218 Democrats, 36 Republican Members of this body
voting for it.
These men and women worked hard. They followed the rules, and then
they got the rug pulled from under them. When the government rescued GM
and left these workers behind, their families were left hanging, and
that was wrong.
At the appropriate time, I will offer a motion to recommit this bill
back to committee. If the House rules had permitted, I would have
offered the motion with an important amendment to the bill. My
amendment would substitute this legislation with the Susan Muffley Act,
my bipartisan legislation that would right the wrong for the Delphi
salaried retirees, restoring their pension benefits that they were
expected to receive before the bankruptcy.
Again, this bill is a commonsense, bipartisan bill that has already
passed the House of Representatives in a bipartisan fashion. I ask
unanimous consent to insert the text of my amendment immediately prior
to the vote on the motion to recommit.
The SPEAKER pro tempore (Ms. Tenney). Is there objection to the
request of the gentleman from Michigan?
There was no objection.
Mr. KILDEE. Madam Speaker, in closing I will just say this: I hope my
colleagues join me. This is something we ought to be able to do
together. We ought to solve this problem in a bipartisan fashion. I ask
you to join me in voting for the motion to recommit to right this
historic wrong for the Delphi salaried retirees.
Ms. FOXX. Madam Speaker, I yield 2 minutes to the gentlewoman from
Illinois (Mrs. Miller).
Mrs. MILLER of Illinois. Madam Speaker, the Biden-Harris
administration is once again putting its radical political agenda ahead
of the well-being of the American people. The administration's new rule
would put the retirement fund of millions of Americans at risk by
forcing fiduciaries to consider ESG over financial factors. This is
deeply irresponsible.
ESG funds are well known for poor performance and high risk, yet this
administration is encouraging fiduciaries to gamble with retirees'
hard-earned savings. This rule shows that the Biden-Harris
administration doesn't care about the financial security of millions of
retirees.
Retirement savings should focus on maximizing returns, not advancing
the far left's political agenda. Americans invest to provide for
themselves and their families, not to fund activist projects or woke
policies.
Fortunately, Republicans are taking action to stop this dangerous
trend with the Protecting Americans' Investments from Woke Policies
Act. This bill ensures that retirement plans are focused solely on
economic factors, protecting workers' savings from politically driven,
underperforming ESG investments.
Madam Speaker, I urge my colleagues to support this bill.
Ms. MANNING. Madam Speaker, I yield 3 minutes to the gentleman from
Illinois (Mr. Casten), my good friend.
Mr. CASTEN. Madam Speaker, let me pose a question to everybody in
here. Why do pension fund managers, why do State treasurers, why do
individual investors invest in ESG funds? Well, I will give you a hint.
It is the same reason that they invest in high-yield bonds or mid-cap
international equities or real estate investment trusts or anything
else that is a part of a diversified portfolio. It is because they
believe that it will make them more money; not ``know.'' None of us
know, but they believe.
Maybe my colleagues across the aisle don't believe that companies
that attract and retain diverse talent create more long-term value.
Maybe my colleagues across the aisle don't believe that climate change
is real and don't believe that companies who are repositioning their
assets for a world with higher sea levels, with more frequent forest
fires, and with rapidly moving consumer demand in favor of cheaper,
cleaner energy are better positioned to win the future.
That is your right. Nobody is telling you that you have to wake up
and stop investing in sleepy companies that are missing out on what is
happening in the future.
Yet, here we are. Having defended your right to invest however you
want, you are now saying that fiduciaries with opinions different from
your own should not be free to invest as they see fit. That is not pro-
market.
Let me tell you that if you have fallen in love with State-directed
capitalism, I would encourage you to talk to, I don't know, maybe some
Chinese
[[Page H5348]]
or Soviet economic leaders who can tell you how that plays out.
Yet, we find ourselves here with the Republican Party introducing
legislation that not only rips off the policies of Lenin and Mao, but
also unsurprisingly rips off Project 2025 because what all those have
in common is you would like to use the power of the State to protect
your political allies against the vicissitudes of a competitive market.
Let's be really clear, though. This is not just about politics. Real
Americans in red States, I would point out, are losing money today
because of these policies. In Texas, anti-ESG laws like the one you are
proposing are costing the State nearly $700 million in lost economic
activity and more than 3,000 jobs.
In Kansas, the State budget office has estimated that anti-ESG laws
there would cost retirees $3.6 billion in lost returns over 10 years.
That is what you are imposing on the rest of the world if you
accomplished this.
Madam Speaker, I get it, competition is hard. It is scary. Climate
change is real, and no matter how nightmarish certain White folks of
low character might find the realization of Martin Luther King's dream,
it is the only way that we move forward as a society. In the name of
free markets and a brighter tomorrow, I would urge a ``no'' vote.
Ms. FOXX. I ask that the speaker's words be taken down.
Mr. CASTEN. On what basis?
The SPEAKER pro tempore. The gentleman will suspend. The Clerk will
report the words.
The gentleman will take a seat.
{time} 1515
Ms. FOXX. Mr. Speaker, I withdraw my demand.
The SPEAKER pro tempore (Mr. Bentz). The demand is withdrawn.
Mr. CASTEN. Mr. Speaker, I reiterate, as I hope was clear from the
plain text of my remarks, they were not directed at anybody in the
Chamber.
Mr. Speaker, I close by saying, in the name of free markets and a
brighter, more tolerant tomorrow, I urge a ``no'' vote on this bill.
Ms. FOXX. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, it is important, I think, that we again set the record
straight. The RETIRE Act codifies the principles in the Trump Labor
Department rule on retirement plan ESG investing. Under this bill, as
with the Trump rule, if a fiduciary finds that an ESG factor is a
pecuniary or financial factor, then that factor can be considered when
investing and exercising shareholder rights. Nothing in the Trump rule
prevents a fiduciary from appropriately considering any material risk
with respect to investment.
Like the Trump rule, the RETIRE Act recognizes ESG factors can
present an economic risk or opportunity, which qualified investment
professionals would appropriately treat as material economic
considerations under generally accepted investment principles.
This bill neutrally applies financial investment principles to all
investment decisions. To suggest that this bill bars a fiduciary from
appropriately considering any factors that may be material to an
investment is blatantly false. Unlike the Biden-Harris rule, this
legislation is neutral regarding fiduciaries' prudent decisions.
Mr. Speaker, I reserve the balance of my time.
Ms. MANNING. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, contrary to what we have heard this afternoon, the
Biden-Harris administration has put forth a sensible rule related to
ESG investing that puts the decisionmaking where it belongs: with the
retirement plan professionals who are best positioned and bound by law
to make sound decisions on behalf of workers. They, not Members of
Congress, know what is best for their particular retirement plan.
H.R. 5339 reflects a mistaken premise that House Republicans, not
retirement plan professionals bound by fiduciary responsibilities, know
what is best. A diverse group of stakeholders, including the AFL-CIO,
AFSCME, Americans for Financial Reform, League of Conservation Voters,
National Women's Law Center, Oxfam America, and others weighed in
against this bill.
Mr. Speaker, I include in the Record two letters.
AFL-CIO,
September 17, 2024.
Dear Representative: On behalf of the AFL-CIO, I urge you
to oppose H.R. 5339, RETIRE Act, which is composed of the
following four anti-ESG bills:
No Discrimination in My Benefits Act (H.R. 5338).
Retirement Proxy Protection Act (H.R. 5337).
Providing Complete Information to Retirement Investors Act
(H.R. 5340).
Roll Back ESG to Increase Retirement Earnings Act (H.R.
5339).
H.R. 5339 would roll back or block the inclusion of
relevant investment factors in retirement plans, which
include environmental, social, and governance (``ESG'')
risks. Pension plans represent the deferred wages of hard
working Americans, and ERISA requires plan fiduciaries to
invest plan assets according to the duties of prudence and
loyalty in order to maximize benefits.
H.R. 5339 would limit the criteria fiduciaries can consider
when selecting investments to solely pecuniary or financial
factors. The only exception is when two investments are
indistinguishable based purely on pecuniary factors or the
fiduciary satisfies burdensome documentation requirements.
Similarly, provisions from H.R. 5337 will discourage
fiduciaries from voting proxies on ESG issues that might be
considered ``non-pecuniary.'' This bill would effectively
disfranchise retirement plan participants from having their
shares voted on important ESG issues. The Department of Labor
(``DOL'') has wisely rejected the distinction between
pecuniary and non-pecuniary factors based on concerns that
this terminology causes confusion and has a chilling effect
on investment choices that may increase plan participants'
retirement income security.
Provisions from H.R. 5338 prohibit the consideration of
diversity by ERISA plans when selecting a fiduciary, counsel,
employee, or service provider. We oppose this bill as a
blatant attempt to obstruct efforts to address under
representation of minority- and women-owned firms in asset
management. DOL rules permit ERISA plans to consider the
benefits of investment advisor diversity so long as the plan
does not sacrifice risk-adjusted returns. Indeed, studies
have shown that diversity can be a source of investment
outperformance by casting a wider net for professional
talent.
Provisions from H.R. 5340 were intended to deter self-
directed defined contribution plan participants from
selecting ESG investments, for example those in a 401(k)
plan. This legislation would require defined contribution
plans to provide a written warning to participants who are
choosing from investments through a brokerage window rather
than those selected by the plan. While we do not oppose
suitable warnings for plan participants that choose to invest
through a brokerage window, we are concerned that this bill
is intended to interfere with the freedom of 401(k) plan
participants to invest in ESG-related funds of their own
choosing.
Continued attempts to block plans from considering ESGs
have deep impacts on retirees. ESGs are critical factors in
assessing and mitigating risks and creating opportunities for
enhanced returns. Therefore, AFL-CIO urges you to oppose H.R.
5339.
Sincerely,
Jody Calemine,
Director, Government Affairs.
____
September 17, 2024.
Re Opposition to anti-ESG bills that threaten workers'
retirement security and our financial system, and weaken
tools of corporate accountability.
Hon. Mike Johnson,
Speaker, House of Representatives,
Washington, DC.
Hon. Hakeem Jeffries,
Minority Leader, House of Representatives,
Washington, DC.
Dear Speaker Johnson and Minority Leader Jeffries:
Americans for Financial Reform (AFR) and the 39 undersigned
organizations write in opposition to Prioritizing Economic
Growth Over Woke Policies Act (H.R. 4790) and the Protecting
Americans' Investments from Woke Policies Act (H.R. 5339),
which are packages of several bills that are part of a
broader, unpopular campaign against common sense investment
practices. This campaign seeks to both force financial actors
to ignore a slew of financial risks to the detriment of
workers' retirement security and the integrity of our
financial system, and weaken tools of corporate
accountability. The bills at issue were marked up by the
House Financial Services Committee (HFSC) and the House
Committee on Education and the Workforce. If passed, they
would represent a giveaway to corporations at the expense of
workers, investors, and the public.
The bills marked up by HFSC in July of last year were the
culmination of what the committee's majority publicly
characterized as ``ESG month''--a series of six hearings and
a markup designed to discourage financial actors from taking
into account environmental, social, and governance (ESG)
factors in their investment decision-making and undermine
corporate accountability. The bills can be categorized based
on the effects they would have: (1) undermine regulations
that would equip investors with more information to make
better investment decisions (H.R. 4790); (2) insulate the
management of public companies from investor
[[Page H5349]]
input and accountability, including by eliminating
fundamental investor rights to file shareholder proposals
(H.R. 4767 and H.R. 4655); and (3) hamstring the ability of
federal banking regulators to respond effectively to micro-
and macro-prudential risks to the financial system (H.R.
4823). For a more detailed discussion of these bills, see
AFR's letter of opposition submitted ahead of the markup.
The bills marked up by the House Committee on Education and
the Workforce in September would amend the Employee
Retirement Income Security Act (ERISA) with the effect of
undermining workers' retirement security. Two of the bills--
H.R. 5339 and H.R. 5337--have a longer history, mirroring two
Trump-era Department of Labor (DOL) rules. Those rules were
widely criticized and have since been rescinded because they
produced significant confusion about what fiduciaries are
allowed to consider when making investment decisions, and had
a chilling effect on the consideration of financially
relevant information--thereby putting workers' retirement
security at risk. The other two bills would also harm workers
saving for retirement, H.R. 5338 by interfering with efforts
to increase diversity among asset managers managing workers'
savings and H.R. 5340 by mandating confusing and misleading
information be sent to investors. For a more detailed
discussion of these bills, see AFR's letter of opposition
submitted ahead of the markup.
Congress should not lend support to an effort that would
harm the public interest and has triggered fierce and
effective opposition from a broad coalition of diverse
stakeholders. For example, state-level anti-ESG legislation--
which included 161 pieces of legislation introduced in 28
states this year--faced significant pushback from public
pension beneficiaries, retirement system officials, bank and
local business associations, and unions. As a result, the
vast majority of the bills were defeated. A strong coalition
has also opposed past anti-ESG congressional actions.
Voters overwhelmingly oppose measures like these. Although
the anti-ESG campaign is well-funded, polling decidedly shows
a strong majority of voters do not support its goals. For
example, 63 percent of voters do not believe the government
should set limits on corporate ESG investments. And when it
comes to how companies should operate in our society, ``most
voters (76 percent) feel companies play a vital role in
society and should be held accountable to make a positive
impact on the communities in which they operate.'' This
includes both the majority of Republicans (69 percent) and
the majority of Democrats (82 percent), reflecting strong
bipartisan support. Additionally, a recent poll by Public
Citizen found that voters oppose Congress passing legislation
to limit the type of information about a corporation's
business record that is disclosed to pension and retirement
fund managers, investors, and the public, and that voters
would reward an elected official who favors requiring
corporations to disclose environmental, social, and
governance information about their business dealings to
investors and the public.
For all the reasons stated above, the undersigned
organizations urge you to oppose these anti-ESG bills. Thank
you for your consideration of our perspective.
Sincerely,
Americans for Financial Reform; 17 Communications; 350.org;
Adrian Dominican Sisters, Portfolio Advisory Board; AFL-CIO;
Alabama Interfaith Power & Light; American Federation of
State, County and Municipal Employees (AFSCME); American
Federation of Teachers; Center for Popular Democracy;
ClientEarth USA; Communications Workers of America;
Congregation of St. Joseph; Daughters of Charity, Province of
St. Louise; Environmental Defense Fund; For the Long Term;
Global Reporting Initiative (GRI); Green America; Interfaith
Center on Corporate Responsibility; International Brotherhood
of Teamsters; Invest Vegan.
League of Conservation Voters; Majority Action; Mercy
Investment Services, Inc.; National Education Association;
National Women's Law Center; NETWORK Lobby for Catholic
Social Justice; Oxfam America; Private Equity Stakeholder
Project; Public Citizen; RFK Human Rights; Rhia Ventures;
Rise Economy (formerly California Reinvestment Coalition);
Sierra Club; SOC Investment Group; Stance Capital; Strong
Economy For All Coalition; Take on Wall Street; The People's
Justice Council; Tulipshare, Sustainable Investment Fund;
Unlocking America's Future.
Ms. MANNING. Mr. Speaker, we should reject this bill, and I yield
back the balance of my time.
Ms. FOXX. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, we have heard today about the riskiness of ESG. We have
heard about the radicalness of ESG. We have heard about the racism
inherent in ESG investing.
If today's debate has proven one thing, it is that wokeness will not
be satisfied until the entire country thinks the same way.
To my colleagues, I urge that we return to the neutral fiduciary
standard. Let's quit playing ideological games that have a real impact
on workers' livelihoods.
To my banking-sector friends, I will put it this way: There is no
alpha in ESG. Our adversaries will surpass the American financial
industry if we continue down this path.
The Protecting Americans' Investments from Woke Policies Act would
safeguard our financial system from politically driven agendas,
ensuring that capital is allocated based on merit and performance, not
ideology.
For these reasons, I support its passage, and I yield back the
balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 1455, the previous question is ordered
on the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit
Mr. KILDEE. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. Kildee of Michigan moves to recommit the bill H.R. 5339
to the Committee on Education and the Workforce.
The material previously referred to by Mr. Kildee is as follows:
Mr. Kildee moves to recommit the bill H.R. 5339 to the
Committee on Education and the Workforce with instructions to
report the same back to the House forthwith, with the
following amendment:
Page 1, strike line 1 and all that follows and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Susan Muffley Act of 2023''.
SEC. 2. GUARANTEED BENEFIT CALCULATION FOR CERTAIN PLANS.
(a) In General.--
(1) Increase to full vested plan benefit.--
(A) In general.--For purposes of determining what benefits
are guaranteed under section 4022 of the Employee Retirement
Income Security Act of 1974 (in this section referred to as
``ERISA'') with respect to an eligible participant or
beneficiary under a covered plan specified in paragraph (4)
in connection with the termination of such plan, the amount
of monthly benefits shall be equal to the full vested plan
benefit with respect to the participant.
(B) No effect on previous determinations.--Nothing in this
Act shall be construed to change the allocation of assets and
recoveries under sections 4044(a) and 4022(c) of ERISA as
previously determined by the Pension Benefit Guaranty
Corporation (in the section referred to as the
``corporation'') for the covered plans specified in paragraph
(4), and the corporation's applicable rules, practices, and
policies on benefits payable in terminated single-employer
plans shall, except as otherwise provided in this section,
continue to apply with respect to such covered plans.
(2) Recalculation of certain benefits.--
(A) In general.--In any case in which the amount of monthly
benefits with respect to an eligible participant or
beneficiary described in paragraph (1) was calculated prior
to the date of enactment of this Act, the corporation shall
recalculate such amount pursuant to paragraph (1), and shall
adjust any subsequent payments of such monthly benefits
accordingly, as soon as practicable after such date.
(B) Lump-sum payments of past-due benefits.--Not later than
180 days after the date of enactment of this Act, the
corporation, in consultation with the Secretary of the
Treasury and the Secretary of Labor, shall make a lump-sum
payment to each eligible participant or beneficiary whose
guaranteed benefits are recalculated under subparagraph (A)
in an amount equal to--
(i) in the case of an eligible participant, the excess of--
(I) the total of the full vested plan benefits of the
participant for all months for which such guaranteed benefits
were paid prior to such recalculation, over
(II) the sum of any applicable payments made to the
eligible participant; and
(ii) in the case of an eligible beneficiary, the sum of--
(I) the amount that would be determined under clause (i)
with respect to the participant of which the eligible
beneficiary is a beneficiary if such participant were still
in pay status; plus
(II) the excess of--
(aa) the total of the full vested plan benefits of the
eligible beneficiary for all months for which such guaranteed
benefits were paid prior to such recalculation, over
(bb) the sum of any applicable payments made to the
eligible beneficiary.
Notwithstanding the previous sentence, the corporation shall
increase each lump-sum payment made under this subparagraph
to account for foregone interest in an amount determined by
the corporation designed to reflect a 6 percent annual
interest rate on each past-due amount attributable to the
underpayment of guaranteed benefits for each month prior to
such recalculation.
[[Page H5350]]
(C) Eligible participants and beneficiaries.--
(i) In general.--For purposes of this section, an eligible
participant or beneficiary is a participant or beneficiary
who--
(I) as of the date of the enactment of this Act, is in pay
status under a covered plan or is eligible for future
payments under such plan;
(II) has received or will receive applicable payments in
connection with such plan (within the meaning of clause (ii))
that does not exceed the full vested plan benefits of such
participant or beneficiary; and
(III) is not covered by the 1999 agreements between General
Motors and various unions providing a top-up benefit to
certain hourly employees who were transferred from the
General Motors Hourly-Rate Employees Pension Plan to the
Delphi Hourly-Rate Employees Pension Plan.
(ii) Applicable payments.--For purposes of this paragraph,
applicable payments to a participant or beneficiary in
connection with a plan consist of the following:
(I) Payments under the plan equal to the normal benefit
guarantee of the participant or beneficiary.
(II) Payments to the participant or beneficiary made
pursuant to section 4022(c) or otherwise received from the
corporation in connection with the termination of the plan.
(3) Definitions.--For purposes of this subsection--
(A) Full vested plan benefit.--The term ``full vested plan
benefit'' means the amount of monthly benefits that would be
guaranteed under section 4022 of ERISA as of the date of plan
termination with respect to an eligible participant or
beneficiary if such section were applied without regard to
the phase-in limit in subsection (b)(1) of such Act and the
maximum guaranteed benefit limitation in subsection (b)(3) of
such Act (including the accrued-at-normal limitation).
(B) Normal benefit guarantee.--The term ``normal benefit
guarantee'' means the amount of monthly benefits guaranteed
under such section with respect to an eligible participant or
beneficiary without regard to this Act.
(4) Covered plans.--The covered plans specified in this
paragraph are the following:
(A) The Delphi Hourly-Rate Employees Pension Plan.
(B) The Delphi Retirement Program for Salaried Employees.
(C) The PHI Non-Bargaining Retirement Plan.
(D) The ASEC Manufacturing Retirement Program.
(E) The PHI Bargaining Retirement Plan.
(F) The Delphi Mechatronic Systems Retirement Program.
(5) Treatment of pbgc determinations.--Any determination
made by the corporation under this section concerning a
recalculation of benefits or lump-sum payment of past-due
benefits shall be subject to administrative review by the
corporation. Any new determination made by the corporation
under this section shall be governed by the same
administrative review process as any other benefit
determination by the corporation.
(b) Trust Fund for Payment of Increased Benefits.--
(1) Establishment.--There is established in the Treasury of
the United States a trust fund to be known as the ``Delphi
Full Vested Plan Benefit Trust Fund'' (hereafter in this
subsection referred to as the ``Fund''), consisting of such
amounts as may be appropriated or credited to the Fund as
provided in this section.
(2) Funding.--There is appropriated from the general fund
such amounts as are necessary for the costs of the payment of
the portion of monthly benefits guaranteed to a participant
or beneficiary pursuant to subsection (a) and for necessary
administrative and operating expenses of the corporation
relating to such payment. The Fund shall be credited with
amounts from time to time as the Secretary of the Treasury,
in conjunction with the Director of the corporation,
determines appropriate, from the general fund of the
Treasury.
(3) Expenditures from fund.--Amounts in the Fund shall be
available for the payment of the portion of monthly benefits
guaranteed to a participant or beneficiary pursuant to
subsection (a) and for necessary administrative and operating
expenses of the corporation relating to such payment.
(c) Regulations.--The corporation, in consultation with the
Secretary of the Treasury and the Secretary of Labor, may
issue such regulations as necessary to carry out this
section.
(d) Tax Treatment of Lump-Sum Payments.--
(1) In general.--Unless the taxpayer elects (at such time
and in such manner as the Secretary may provide) to have this
paragraph not apply with respect to any lump-sum payment
under subsection (a)(2)(B), the amount of such payment shall
be included in the taxpayer's gross income ratably over the
3-taxable-year period beginning with the taxable year in
which such payment is received.
(2) Special rules related to death.--
(A) In general.--If the taxpayer dies before the end of the
3-taxable-year period described in paragraph (1), any amount
to which paragraph (1) applies which has not been included in
gross income for a taxable year ending before the taxable
year in which such death occurs shall be included in gross
income for such taxable year.
(B) Special election for surviving spouses of eligible
participants.--If--
(i) a taxpayer with respect to whom paragraph (1) applies
dies,
(ii) such taxpayer is an eligible participant,
(iii) the surviving spouse of such eligible participant is
entitled to a survivor benefit from the corporation with
respect to such eligible participant, and
(iv) such surviving spouse elects (at such time and in such
manner as the Secretary may provide) the application of this
subparagraph,
subparagraph (A) shall not apply and any amount which would
have (but for such taxpayer's death) been included in the
gross income of such taxpayer under paragraph (1) for any
taxable year beginning after the date of such death shall be
included in the gross income of such surviving spouse for the
taxable year of such surviving spouse ending with or within
such taxable year of the taxpayer.
The SPEAKER pro tempore. Pursuant to clause 2(b) of rule XIX, the
previous question is ordered on the motion to recommit.
The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. KILDEE. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
____________________