WASHINGTON, D.C. – On September 14, the House Education and the Workforce Committee passed
Congressman Bob Good’s (VA-05) bill, H.R.5338, the No Discrimination in My Benefits Act, by a vote of 23 to 19. This legislation ensures that fiduciaries of employee benefits plans choose their employees based on the prudence and loyalty standards and do not incorporate woke Diversity, Equity, and Inclusion (DEI) policies.
Good’s efforts underscore the necessity of selecting service providers on a nondiscriminatory basis, with a primary focus on the financial well-being of employee benefit plans. The bill, which would amend the Employee Retirement Income Security Act (ERISA), explicitly states that race, color, sex, or national origin should not be factors in selecting fiduciaries, counsel, employees, or service providers.
“President Biden has imposed his woke DEI agenda throughout every part of the Federal Government. From job descriptions to retirement plans, Biden is using every lever of power to advance his agenda in the name of ‘equity,’” said Rep. Good. “My legislation will protect employee benefits from the political agendas of Washington bureaucrats. I thank my Republican committee colleagues for unanimously supporting this effort, and I hope it will be scheduled for a floor vote soon.”
The legislation is now Rep. Good’s fourth bill of the 118th Congress that is eligible to receive consideration on the House floor.
Background
- Under the Employee Retirement Income Security Act (ERISA), the fiduciaries of employee benefit plans are required to adhere to standards of prudence and loyalty to the beneficiary. This means that fiduciaries must act solely in the interest of the beneficiary, continually monitoring the appropriateness of investments.
- In this relationship, the beneficiary trusts that the fiduciary has the expertise and knowledge best suited to meet their retirement goals.
- The Supreme Court has affirmed this commitment to sound financial stewardship. In Third Bancorp v. Dudenhoefer, the Court said that the fiduciary duties described in ERISA statute refer to a responsibility to provide financial benefits to beneficiaries, rather than “nonpecuniary benefits.”
- Under this interpretation, there is no room for advancing collateral goals like DEI when selecting service providers to an ERISA plan.
- Last year, several Senators sent letters
- to 25 large companies requesting information about the gender and race of the asset managers of their pension plans. The letter voiced concern over the “problem” of white men dominating the industry and demanded answers from the companies on their plans to diversify their employees based on sex and race, rather than their skill and expertise.
- In June 2022, Sens. Robert Menendez (D-NJ), Elizabeth Warren (D-MA), Alex Padilla (D-CA), Tim Kaine (D-VA), and John Hickenlooper (D-CO) sent letters to 25 large companies requesting information about the gender and race of the asset managers of their pension plans. The letter stated, “Across the industry, the senior leadership level is overwhelmingly white and male…. This is a serious problem….” The letter’s questions included, “What commitments has your corporate pension fund made to increase opportunities for women and minority owned asset management firms?” and “Does your corporate pension fund have established priorities and expectations for investment staff to seek diverse asset managers?”
- In June, the Supreme Court ruled in Students for Fair Admission v. Harvard that basing college admissions decisions on race violates the 14th Amendment and Title VI of the Civil Rights Act. This decision has encouraged skepticism and challenges regarding corporate DEI policies, which could also apply to selection criteria for service providers to ERISA plans.
EducationHealth
Original source can be found here.
