Investors, Workers, and Advocates Oppose Republican Attempts to Circumvent Rule Protecting Retirement Savings
WASHINGTON, D.C.– As Republican lawmakers aim to strike down a Biden administration rule aimed at protecting retirement savings from long-term financial risks, organizations representing investors, workers, and advocates today voiced their support for the safeguards.
Over the past months, Republican lawmakers have plotted to use the Congressional Review Act (CRA) to overturn the rule. A vote on the resolution could come as early as this week.
In a series of three letters to House and Senate lawmakers, the groups rally around the Department of Labor’s “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” rule, finalized in November 2022. The rule affirms that fiduciaries who manage retirement savings can account for long-term risks and opportunities in their investment decisions and removes costly and unnecessary barriers to the exercise of shareholder rights.
- Letter from Americans for Financial Reform, Public Citizen and 60 organizations
- Letter from Environmental Defense Fund, the League of Conservation Voters and 15 organizations
- Letter from the Interfaith Center on Corporate Responsibility
“Republicans are leading an effort to nullify a Department of Labor rule that is about protecting workers and their life savings,” said Natalia Renta, senior policy counsel for corporate governance and power at Americans for Financial Reform. “The rule safeguards workers’ retirement savings from risks, increases their investment choices, and removes barriers to the exercise of their shareholder rights. Those considering supporting the effort to nullify this important rule should ask themselves whose side they are on: workers whose retirement security is at stake or fossil fuel billionaires attempting to hold on to their wealth and power regardless of the consequences for everyone else?”
“Republicans attempting to use the Congressional Review Act to overturn the DOL rule are undermining the essential responsibility of retirement plan managers to protect workers from risk,” said Rachel Curley, democracy advocate with Public Citizen’s Congress Watch. “It is a critical part of plan managers’ fiduciary duty to consider all risks and opportunities to their portfolios including how companies treat their workforce, whether they pay their fair share of taxes, how companies engage in politics, what’s happening in corporate supply chains, and how companies are preparing for a greener future. The DOL rule affirms that fiduciaries can take these factors into account, and any attempt to overturn it puts workers’ hard- earned retirement savings at risk.”
“Pension fund fiduciaries have a duty of impartiality to safeguard the returns of all pension fund beneficiaries, including those whose pensions will be vesting decades from now,” said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility. “The DOL’s recent ERISA rule enables pension fund fiduciaries to consider long-term risk in their investments, in order to better protect the retirement security of generations of American workers. The short-sighted effort in Congress to use the CRA to invalidate this important DOL rule prioritizes political culture war considerations over the long-term well-being of workers.”
“People preparing for retirement have to be able to consider all types of financial risks when making investment decisions; financial risks due to climate change shouldn’t be treated any differently,” said David Shadburn, Government Affairs Advocate at the League of Conservation Voters. “The Department of Labor rule restores plan managers’ freedom to consider all financially relevant factors so they can offer prudent investment choices to workers. Congress must protect people’s retirement savings by rejecting this Congressional Review Act resolution. Workers in our country deserve no less.”
“It’s wrong that some lawmakers would play politics with Americans’ financial futures by preventing retirement fund managers from considering all risks – including financial risks related to climate – when making investment decisions,” said Elizabeth Gore, senior vice president, political affairs, at Environmental Defense Fund. “The standards they’re trying to undermine help fund managers make the best possible decisions when investing our money. There’s too much at stake, and we need Congress to come together to protect our hard-earned savings from political games.”