NEW: 17 State and Big City Financial Leaders Urge SEC to Protect Retirees and Working Americans’ Financial Future, Reject Political Interference

In Letter to SEC and DOL: “Efforts to politicize investment management and restrict fiduciary discretion threaten the financial security of millions of retirees.”

This week, a coalition of 17 state financial officers—including state and big city treasurers, comptrollers, controllers, and auditors—sent a letter to urge the U.S. Securities and Exchange Commission's (SEC) Acting Chairman Mark Uyeda and the Department of Labor (DOL) Acting Secretary Vince Micone to oppose a recent request by Republican state finance officials that the SEC and DOL ban investment managers and retirement plans from factoring broad categories of risks into decision-making processes.

The group of 17 leaders from across the country are calling on the SEC and DOL to reject the attempts by finance officials from other states to bring politics into people’s retirement planning and endanger the future of millions of working Americans and retirees.

The letter comes in response to a January 28, 2025 letter from fellow state financial officers challenging their false and incorrect claims. In this response letter, the group of financial officers call on the SEC Acting Chairman and DOL Acting Secretary to not impose politically-motivated barriers and to protect the ability of the professionals—who manage millions of Americans’ financial accounts—to serve the interests of hardworking everyday Americans.

Restrictions on fiduciaries “would put American workers and retirees at a significant disadvantage” and “U.S. retirement funds could become less competitive and more vulnerable to market disruptions… Ensuring that fiduciaries can operate with the full breadth of risk assessment tools available is essential to maintaining trust in our financial system and safeguarding the future of America’s retirees.”

The letter also notes that fiduciaries should be allowed to consider long-term financial risks because retirement investments are built over a lifetime and require a “multi-decade approach to investment risk” to ensure that the hard-earned money from Americans remains resilient, secure, and ready to collect. 

A copy of the full letter is below, urging the SEC and DOL to reject artificial and politically-motivate constraints on fiduciary decision-making that would impact millions of hard-working Americans.

To connect with the press teams for a state treasurer or auditor who signed onto today’s letter, please email us at a4rg@focalpointstrategygroup.com.

Dear Acting Chairman Uyeda and Acting Secretary Micone,

We write in response to the letter sent by several state financial officers on January 28, 2025. This letter contains claims which we disagree with regarding the fiduciary responsibilities of retirement plan managers and the necessity of assessing long-term financial risks. We believe that it is critical to rebut these assertions and reaffirm the essential role that prudent risk management plays in securing the financial futures of millions of working Americans and retirees.

Retirement Plan Fiduciaries Must Consider Long-Term Financial Risks

The letter relies on the Court’s claims in Spence v. American Airlines, suggesting that evaluating broad categories of risk factors is merely a ‘pretext’ for pursuing non-pecuniary goals and that considering long-term financial risks is unnecessary. This characterization is both incorrect and dangerously misleading.

Retirement plan fiduciaries must consider long-term financial risks because they are investing over the entire expected lifespans of their plan participants and beneficiaries. Unlike short-term investors, who may be focused on quarterly returns, fiduciaries managing pension funds, 401(k)s, and other retirement accounts must take a multi-decade approach to investment risk. This means evaluating all factors that could materially impact long-term financial performance, including risks related to governance failures, workforce management, regulatory changes, and climate impacts.

Ignoring long-term risks—whether they stem from financial instability, workforce issues, or environmental changes—would itself be a breach of fiduciary duty. It is the responsibility of investment professionals to ensure that portfolios remain resilient across market cycles, economic disruptions, and emerging global risks. The notion that fiduciaries should overlook material risks because they extend beyond immediate financial reporting periods is both shortsighted and contrary to responsible investment management.

Rebutting Misguided Assertions

The letter further cites the Court in Spence v. American Airlines, which dismisses climate change as an ‘unproven and nebulous issue’ and suggests that labeling it as financially material is merely a rhetorical device. This assertion is entirely contradicted by real-world financial data. Investors—including some of the world’s largest asset managers—routinely evaluate the financial impact of extreme weather events, regulatory shifts in energy policy, and the economic costs of climate-related disruptions.

The decision in Spence v. American Airlines, which dismissed long-term financial interests as a “mere pretext,” fails to reflect the fundamental reality of long-term investing. Fiduciaries are not speculators—they are stewards of trillions of dollars in assets that must sustain retirees for decades. The risks associated with climate change, governance failures, and other systemic issues are not speculative concerns but present-day financial realities affecting market valuations, insurance costs, supply chains, and infrastructure resilience.

Fiduciary Duty Requires Comprehensive Risk Evaluation

Fiduciaries may reasonably disagree over the importance of these long-term financial risks, and these differing views are an inherent part of the free enterprise system where market participants freely trade securities and make proxy voting decisions based on their own investment philosophies. The government should not seek to impose the views of a subset of investors who do not believe that long-term financial risks are material to investors onto the rest of the marketplace. This laissez faire philosophy is embedded in the DOL’s existing regulations of retirement plan fiduciaries that states that fiduciaries may, but are not required to consider such risks.

The SEC and DOL have long recognized that investment professionals must be free to assess risks that could impact portfolio performance over time. Any attempt to limit fiduciaries’ discretion undermines investor confidence and financial security. Politicizing risk assessment does not protect American retirees; it actively weakens their financial futures by restricting prudent investment management. 

Regulatory Overreach Would Harm Investors

Restricting fiduciaries from considering legitimate financial risks would put American workers and retirees at a significant disadvantage. Global investors are not operating under these same restrictions, meaning U.S. retirement funds could become less competitive and more vulnerable to market disruptions. If policymakers impose artificial limits on what risks fiduciaries can consider, it could lead to:

• Weaker investment performance due to incomplete risk assessments.

• Greater exposure to market volatility from ignored risks.

• Increased financial vulnerability for retirees relying on pension and retirement savings.

A free and fair market requires that investment professionals have the autonomy to make informed decisions based on financial principles, not politically motivated restrictions.

Conclusion

We urge the SEC and DOL to uphold their commitment to protecting the ability of fiduciaries to exercise their professional judgment in assessing long-term financial risks. Efforts to politicize investment management and restrict fiduciary discretion threaten the financial security of millions of retirees.

The very essence of fiduciary duty is to make investment decisions that serve the best interests of plan participants and beneficiaries over the long term. Imposing artificial barriers that prevent investment professionals from considering material risks does not just undermine free markets—it jeopardizes the financial stability of hardworking Americans who rely on well-managed retirement plans.

We strongly encourage the SEC and DOL to resist efforts to limit fiduciary discretion and impose politically driven constraints on investment decision-making. Ensuring that fiduciaries can operate with the full breadth of risk assessment tools available is essential to maintaining trust in our financial system and safeguarding the future of America’s retirees.

Signed,

Julie Blaha, Minnesota State Auditor

Zach Conine, Nevada State Treasurer

Colleen C. Davis, Delaware State Treasurer

Dereck E. Davis, Maryland State Treasurer

James Diossa, Rhode Island State Treasurer

Michael W. Frerichs, Illinois State Treasurer

Deborah B. Goldberg, Massachusetts State Treasurer and Receiver-General

Fiona Ma, California State Treasurer 

Laura M. Montoya, New Mexico State Treasurer

Michael Pellicciotti, Washington State Treasurer

Mike Pieciak, Vermont State Treasurer

Erick Russell, Connecticut State Treasurer

Elizabeth Steiner, Oregon State Treasurer

David L. Young, Colorado State Treasurer

Brad Lander, New York City

Comptroller 

Malia M. Cohen, California

Controller

Brooke E. Lierman, Maryland

Comptroller