Protecting Prudent Investment of Retirement Savings Act

Floor Speech

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Mr. CASTEN. Mr. Speaker, I rise in opposition to H.R. 2988.

I am going to be honest. I cannot believe we are still engaged in this anticapitalist doublespeak; but if my Republican colleagues are going to keep bringing bills to the floor to destroy the fabric of our market-based economy, I am going to keep standing up for it.

Let's be clear: ERISA already requires fiduciaries to act solely in the financial interests of plan participants and beneficiaries. H.R. 2988 does not strengthen that standard. It simply assumes that a handful of paternalistic legislators know more about the interests of America's businessowners than they do.

Before coming to Congress, I was a CEO of an energy company. We raised a couple hundred million dollars to build that business, and I was understandably accountable to a board appointed by those investors.

I am trying to imagine a world where I showed up at a board meeting and told the owners of the company that I was leading that they were not allowed to ask me certain questions because, in my judgment, I had determined that their questions were nonpecuniary. That is not a world where I would have been employed for very long.

It also wouldn't have been good for our business because different investors have different time horizons. You have got short-term investors who are concerned about next year's cash flows, but then you can have long-term investors, like pension funds, endowments, and family offices, who are going to be concerned about longer term risks including, but not limited to, your governance, your environmental exposures, who you hire, what kind of liabilities you are taking on, and that is fine. That is how a functioning market works.

But H.R. 2988 prioritizes those short-term investors by creating an arbitrary distinction between pecuniary and nonpecuniary risk factors. That requires investors to ignore financially relevant information that they, in their sole discretion, believe impact long-term performance.

Why should we mandate ignorance? It is not the Federal Government's job to tell fiduciaries what categories of risk they can consider. Making investors dumber will only serve to drive capital out of U.S. markets, and that is not just theoretical.

In Oklahoma, public pension officials estimated that complying with a similar blacklist policy could cost them nearly $10 million. In Arkansas, the State retirement system estimated comparable restrictions could reduce returns by $30 million to $40 million a year. In Indiana, an analysis found it could cost pension returns as much as $6.4 billion over 10 years.

This legislation is not about protecting retirees. It is about protecting mediocre businesses from the vibrancy of well-informed, competitive capital markets. Maybe that satisfies some short-term, partisan political purpose, but it ain't patriotic and certainly ain't capitalism. All this will accomplish is to drive long-term investors out of U.S. equity markets.

For the retirement savings of our police officers, teachers, and firefighters, and for the preservation of U.S. capital markets and capitalism that is free of the meddlesome government intervention that Republicans seem to love, I urge a ``no'' vote and oppose this legislation.

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