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Legislation Would Continue Anti-ESG Retirement Plan Fight


Fresh from the heels of the red state lawsuit filing to prevent the Department of Labor from implementing its new rule related to environmental, social and governance (ESG) investing, two members of Congress announced they’ll reintroduce a Congressional Review Act (CRA) measure to nullify its use in retirement plans.

Rep. Andy Barr, R-Ky., is spearheading the measure in the House and Sen. Mike Braun, R-Ind., is doing so in the Senate. Every Republican Senator and Sen. Joe Manchin (D-WV) will support the resolution, the announcement claimed.

“Retirement plans should be solely focused on delivering maximum returns, not advancing a political agenda,” Barr, Chairman of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy, said in a statement.

He argued that if Congress fails to block the Department of Labor’s rule greenlighting ESG investing in retirement plans, retirees will suffer diminished returns on the investment of their hard-earned money.

“It’s time for Congress to act and I applaud Senator Braun and our colleagues for renewing this fight,” he added.

Braun agreed, noting that “President Biden is jeopardizing retirement savings for millions of Americans for a political agenda. In a time when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons. That’s why we are proud to stand up against this rule for the millions of Americans who depend on these funds for their retirement.”

Last week, a high-profile lawsuit brought by 24 Republican-led states to prevent the DOL’s ESG rule from taking effect threw a wrench into Biden Administration plans.

Plaintiffs claim in Utah v. Walsh that the rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, oversteps the DOL’s statutory authority under ERISA, and called it arbitrary and capricious.