Protecting Prudent Investment of Retirement Savings Act

Floor Speech

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Mr. MAGAZINER. Mr. Speaker, I thank the ranking member for yielding. I rise in opposition to this bill, which will only hurt the retirement savings of millions of Americans.

Our Republican colleagues are once again prioritizing culture wars over working people and threatening the retirement savings of nurses, teachers, police officers, and healthcare workers, who are just trying to save for their future with peace of mind.

The bill before us today injects politics into investment decisions that should be guided by sound financial judgment.

Let me be clear. Environmental, social, and governance risks are material and pecuniary, and companies that adopt thoughtful policies on these risks outperform those that don't over the long term.

If an oil company is cutting corners, and it leads to a spill that is expensive to the company, that hurts shareholders. That hurts people who are saving for retirement. That is a failure to manage an environmental risk.

If a company maintains a culture in the office that allows rampant discrimination that causes lawsuits that are expensive to the company, that is a social factor. That is a material risk.

If executive pay is structured in a way where it is not tied to shareholder performance, that is a risk.

As a former State treasurer, I know that ignoring these risks does not make them disappear.

By the way, the proxy voting process is an important way for shareholders to tell executives at companies when they think that something needs to change. They are nonbinding. What this bill would do is make it harder for shareholders to vote to put even nonbinding items in front of a board to consider.

I have heard the other side say that this bill does not preclude ESG factors from being considered if they are material, but that is not true in practice. What will happen in practice is that SEC bureaucrats and political appointees will get to choose what is material and what is not.

Any time an executive, a corporate executive, doesn't like what a shareholder proposal is about, they can go to the SEC and say: ``Keep this off the ballot. I don't want to see it.'' It will be up to those bureaucrats and political appointees to decide what is material and what is not.

How about we trust the investors? How about we trust the people who are actually doing the work? How about we trust the plan participants, the workers, and the retirees? Anyone who has a 401(k) or an IRA will tell you that they can go on the website and pick from a range of different plans based on what they think is a good idea for them. Why don't we trust them instead of trusting bureaucrats and political appointees to make decisions for everybody else?

Understand why we are here and who this bill helps. This bill helps corporate executives who do not want to be held accountable by their own shareholders.

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Mr. MAGAZINER. Mr. Speaker, this bill helps executives who do not want to be held accountable by their own shareholders for material ESG risks.

It all comes down to time horizons, as Mr. Casten said. When I was State treasurer, I had 60,000 people who were relying on me for their retirement. I had people who were 90- or 100-year-old retirees, and I had first-year teachers who were 23 years old. I owed just as much of a fiduciary duty to those 23-year-olds as the 90-year-olds.

So long-term factors and ESG factors matter even when corporate executives who are focused on the short term don't care about them.

This bill claims to be about free markets. It is the opposite. It is taking choice away from investors and away from retirees and plan participants and putting it in the hands of bureaucrats and political appointees.

Mr. Speaker, I urge a ``no'' vote.

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