Retirement Savings: Prioritizing Financial Returns Over Non-Financial Goals
This bill amends the rules governing retirement savings plans, such as 401k accounts. It mandates that fund managers (fiduciaries) must base investment decisions solely on financial factors that maximize returns and minimize risk for beneficiaries. It explicitly prohibits sacrificing potential profits or taking on extra risk to promote non-financial objectives, such as environmental or social goals. Citizens can expect their retirement funds to be managed with a strict focus on maximizing their future income.
Key points
Retirement fund managers must prioritize the financial interests of savers (maximizing returns) above all other objectives, including social, political, or ideological goals.
Investments must be evaluated only based on their expected impact on risk and return; social or environmental factors cannot be the deciding criteria unless they have a direct, material financial impact.
In plans where employees choose their investments, options promoting non-financial goals can be offered, but they cannot be used as the default investment choice.
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