Legislation recently sponsored by U.S. Sen. Steve Daines (R-MT) would require financial institutions to prioritize the security of workers’ retirement savings over consideration of environmental, social and governance (ESG) factors when making investment decisions for plans subject to the Employee Retirement Income Security Act of 1974 (ERISA).
“Montanans should not have to pay the price for the whims of wokeness with their hard-earned life savings,” Sen. Daines said on July 11. “Fiduciaries must remember their responsibility is to their shareholders, not the woke mob.”
Sen. Daines on June 23 introduced the Securing Employee Retirement Returns Act, S. 4484, which would codify the U.S. Department of Labor rules for fiduciaries under ERISA that were put in place under the Trump administration in October 2020.
President Joe Biden on May 20, 2021 issued an Executive Order on Climate-Related Financial Risk that, among other things, directed the U.S. Labor Secretary to identify agency actions that could be taken under ERISA “to protect savings and pensions of U.S. workers from the threats of climate-related financial risk.”
Biden’s order also directed the Labor Secretary to consider suspending Trump-era fiduciary rules under ERISA that prioritized pecuniary factors over non-pecuniary ones like ESG factors.
If enacted, S. 4484 would amend ERISA to clarify the fiduciary duty of plan administrators to select and maintain investments based solely on pecuniary factors.
“These are financial institutions, not pop-up shops for the radical Left,” said Sen. Daines.
The bill has been referred to the U.S. Senate Health, Education, Labor, and Pensions Committee for consideration.