The House Financial Services Committee advanced the Protecting Americans’ Savings Act, introduced by Congressman Zach Nunn, on Apr. 21. The legislation aims to ban the practice of “robovoting” and strengthen protections for Americans’ retirement savings.
The bill is significant for workers and retirees who depend on 401(k)s and pensions for their financial security. According to Nunn, “Iowa workers and retirees invest their hard-earned paychecks into 401(k)s and pensions with the expectation that their savings will be managed in their best interests.” He said the legislation ensures that those managing Iowans’ retirement funds are not simply approving investment decisions from outside firms without proper review.
Currently, two companies provide recommendations on nearly all shareholder voting in the United States, with many investment managers relying on these recommendations without independent evaluation through a process called robovoting. The new bill would require institutional investors to independently assess proxy recommendations before voting. It also prohibits automatic voting based solely on advisory firm suggestions, restricts outsourcing of voting authority to non-fiduciaries, and clarifies that no investor or firm must cast a proxy vote unless required by fiduciary duty.
Chris Iacovella, President and CEO of the American Securities Association, said: “For too long, the ESG-Industrial Complex has pushed their agenda on public companies during proxy season, harming everyday investors in the process. Proxy advisors are central to this problem… The ASA applauds Rep. Nunn for his leadership on this issue and for protecting investors from the politicized and conflicted business model of proxy advisors.”
Mike Flood of the U.S. Chamber of Commerce added: “The proxy advisory industry operates with too many flaws and too many conflicts for their recommendations to be automatically relied upon during proxy season… This legislation will help protect investors and improve the annual proxy process for public companies.”
Nunn’s office is based in Des Moines, Iowa, serving residents across 21 counties according to his official website. He represents Iowa’s Third Congressional District as noted by his office.
Nunn has prioritized bipartisan policies focused on economic growth, agriculture support, government accountability, national security strengthening, as well as assistance for families and children according to his official website. He serves on both the House Financial Services Committee—which advanced this bill—and House Agriculture Committee according to his official website.
The Protecting Americans’ Savings Act was included as part of a broader package aimed at reducing undue influence over retirement investments by third-party firms.