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1 1 (December 13, 2021)

handle is hein.amenin/aeiaeff0001 and id is 1 raw text is: AMERICAN o\1 E ENTERPRISE SINSTITUTE Comment Paper on Rule Proposed by the Employee Benefits Security Administration, U.S. Department of Labor: Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, October 14, 2021 Benjamin Zycher* December 13, 2021 RIN 1210-AC03 Docket EBSA-2021-0013 CFR 29 CFR 2550 Document Citation 86 FR 57272 Document Number 2021-22263 By electronic submission: https://www.federalre ister-gov/docuiments/2021/10/14/2021-22263/prudeice-and-lovaltv- inseeti D lnIn vestmntI s-ade cisinshrhode-igt The Employee Benefits Security Administration of the U.S. Department of Labor has proposed a revision to the Financial Factors in Selecting Plan Investments rule finalized on November 13, 2020. This revision is inconsistent with the goals and requirements of the Employee Retirement Income Security Act of 1974, as it would weaken the requirement for fund fiduciaries to constrain their investment choices only to the expected risk and return objectives serving the financial interests of fund beneficiaries. By allowing the introduction of Environmental, Social, and Governance and other non-pecuniary objectives and considerations, the proposed rule inexorably would politicize investment decisions to some extent, impose artificial constraints on investment options, and thus reduce expected returns and/or increase risks. The resulting misallocation of capital would inflict adverse effects upon the economy writ large. This proposed rule therefore is perverse and should not be finalized. Moreover, because this proposed rule in effect would rewrite ERISA, any such revision of the law must be enacted by the Congress. Accordingly, the proposed rule is inconsistent with the structure and constraints imposed by the constitution, and thus would erode our constitutional institutions. * Senior Fellow, American Enterprise Institute; a brief biographical summary is available at hos:aeio/r jnz r The views expressed here are solely those of the author. I can be reached at ben inzy,'cher@ aei org. The American Enterprise Institute (AEI) is a nonpartisan, nonprofit, 501(c)(3) educational organization and does not take institutional positions on any issues. The views expressed in this testimony are those of the author.

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