Ranking Member Scott Slams Republican Plan to Interfere With Workers' Retirements

WASHINGTON - Today, Ranking Member Robert C. "Bobby" Scott, House Committee on Education and Workforce, spoke in opposition to H.R. 2988, the Protecting Prudent Investment of Retirement Savings Act, which would restrict fiduciaries' ability to consider environmental, social, and governance factors when making investment decisions, effectively undermining workers' retirement savings.

Watch Ranking Member Scott's remarks on YouTube.

"Thank you, Mr. Speaker. I yield myself such time as I may consume.

"Thank you, Mr. Speaker. I rise in opposition to H.R. 2988, the Protecting Prudent Investment of Retirement Savings Act. This bill is premised on Republicans' mistaken belief that they know best when it comes to investing workers' retirement savings.

"Under present law, retirement plan fiduciaries are required to make prudent investment decisions in the best interest of plan participants and beneficiaries. The bill codifies two rules from the first Trump administration that imposed first-of-their-kind restrictions on plan fiduciaries' ability to consider what are called environmental, social, and governance - or ESG - factors when making investment decisions and exercise their shareholder rights.

"The appropriate course of action is to permit fiduciaries to consider ESG factors as long as they don't diminish investment factors. As we know, such factors - whether it be rising sea levels or poor corporate governance - are relevant to a company's performance. It is sensible for plan fiduciaries to be permitted to consider such factors and be able to adopt them if they don't reduce investment returns. As we know, such factors, whether it be sea level rise or poor corporate governance, are relevant to a company's performance.

"Considering whether a real estate investment will literally be underwater because of sea level rise is not ideology. It is sensible for planned fiduciaries to be permitted to consider such factors, and to be able to adopt them if they don't reduce investment returns. And that's precisely what a rule from the Biden administration permitted. Predictably, the Trump administration is walking away from that rule, and now the House is continuing to go in the wrong direction.

"For example, H.R. 2988 would impose unnecessary barriers to considering things like sea level rising. The supporters are making up some risk, suggesting that some of these funds may be worse than others. I think the studies show that there is good or better in fact, than others. Meanwhile, the Trump administration appears poised to greenlight risky investments, such as cryptocurrency, in retirement plans. That doesn't make sense.

"Finally, H.R. 2988 would undermine worthwhile efforts to increase diversity among asset managers. There are about 82 trillion dollars in financial assets in retirement funds, and only 1.4 percent of those assets are managed by women or minority-owned firms. Women and minorities are about two thirds of the population. Yet, they're managing 1.4 percent of the assets. Now, apparently that creates a problem. And the problem is how did they get the 1.4 percent? How did the good old boys lose 1.4 percent? And so, they're going to change the rules to limit access to women and minority owned firms. This bill would needlessly undermine what little progress has been made and actually raises questions about what problem we are trying to solve.

"We should be trusting professionals bound by law - not House Republicans - to make sound decisions about Americans' retirement savings.

"For these reasons, I oppose this bill and encourage my colleagues to do the same. I reserve the balance of my time."

###

Press Contact

Democratic Press Office, 202-226-0853