The simple question that should be asked during each opportunity to consider a health care reform proposal should be, “at what expense?”
Next Thursday, November 15, the Securities and Exchange Commission (SEC) will hold a roundtable on the proxy process. This is an opportunity for the SEC to solicit input from a variety of stakeholders on whether proxy advisory firms work in the best interest of Main Street investors. The roundtable is a critical step in the review process to determine if reforms to the existing rules are necessary to protect Americans’ retirement accounts.
Ahead of the roundtable, the National Association of Manufacturers (NAM) and the U.S. Chamber of Commerce have launched a major initiative to educate Main Street investors in 401(k)s and pension plans on the dangers posed by proxy advisory firms. A digital and print campaign, backed by a significant six-figure investment in print and social media ads, aims to ensure that retirees and those saving for retirement have their voices heard on this serious threat to their futures.
The retirement income of millions of Americans and the performance of the public companies in which they’ve invested their savings are affected by a little-known but powerful group of firms whose influence is gaining overdue attention. Proxy advisers provide recommendations on shareholder proposals despite having little regulatory oversight, and two companies, Institutional Shareholder Services (ISS) and Glass-Lewis, control about 97 percent of the proxy advisory market. These firms lack oversight and can provide bad advice, based on inaccurate numbers or politically motivated agendas, that impacts your retirement savings.
It’s critical that hardworking Americans understand how their retirement savings are being put at risk by largely unregulated entities that operate with little transparency and provide advice that can be tainted by conflicts of interest. The business community has long advocated commonsense corporate governance reforms, including greater oversight of proxy advisory firms. These ads are indicative of the significance with which manufacturers view this issue. The NAM has also submitted a formal comment letter to the SEC outlining our proposed reforms.
The U.S. Chamber Center for Capital Markets Competitiveness (CCMC) recently issued two reports examining how the influence of proxy advisers continues to place undue challenges on businesses and investors. Its 2018 proxy season survey found a minority of companies believe advisory firms adequately researched issues on which they issued advice. And its examination of so-called “zombie” proposals showed the toll that repetitive, failing proposals—often supported by proxy advisers—take on companies and their shareholders.
The ad campaign will help those most threatened by the growing power of proxy advisers to learn more and have their voices heard. Ad samples and additional information can be found at www.proxyreforms.com.
In 2017, manufacturers advocated—and our leaders in Washington delivered—much-needed regulatory relief. Despite what the critics said, we promised that strong economic growth and responsible environmental stewardship can go hand in hand.
There’s no doubt 2017 was a banner year for economic growth and job creation. But now we have proof that it was a good year for environmental stewardship as well: greenhouse gas emissions in the United States declined nearly 3 percent.
The Hill reports the findings from the EPA:
“Harmful greenhouses gases that largely contribute to climate change decreased during President Trump’s first year in office, according to a new Environmental Protection Agency (EPA) report released Wednesday.”
This is great news for the country. Of course, manufacturers have a track record of improving our efficiency and sustainability while growing the economy. Over the past decade, manufacturers have decreased our greenhouse gas emissions by 10 percent while increasing our share of the economy by 19 percent.
Going forward, we will continue to prove the naysayers wrong. We will keep our promise to hire more workers, invest here in America and increase wages and benefits—all while building a future with cleaner air, cleaner water and a healthier environment.
“Manufacturers rely on the nation’s air transportation system to help support business competitiveness, efficiency and growth.”
Today, the Senate Environment & Public Works Committee held a markup and approved the Blocking Regulatory Interference from Closing Kilns Act of 2018 (S. 2461), a bipartisan bill that would permit a full legal review of national emissions standards for brick, clay products and clay ceramics manufacturing before the Environmental Protection Agency (EPA) requires regulatory compliance. On March 7, the House passed similar legislation (H.R. 1917) that was strongly supported by the National Association of Manufacturers (NAM).
The NAM fully supports the ongoing national effort to protect our environment and improve public health through appropriate laws and regulations. However, manufacturers need policies that provide regulatory certainty and ensure a sustainable environment and economy. In September 2015, the EPA issued final National Emissions Standards for Brick, Structural Clay Products and Clay Ceramics Manufacturing, often referred to as Brick MACT. It is estimated that this rule will collectively cost the brick industry, which is made up of predominantly small and medium-sized manufacturers, more than $100 million per year.
When regulations stretch beyond what the law allows, manufacturers and other stakeholders must turn to the courts for relief–a lengthy process that can take months, if not years. Under the Blocking Regulatory Interference from Closing Kilns Act of 2018, if a final rule under this Act is challenged in court, the compliance date extension would be limited to December 26, 2020. However, if the court refutes the EPA’s rule, the legislation requires the agency to issue new regulations within one year. This bill is a commonsense approach, as it ensures that manufacturers will have the certainty that the investments they make are based on laws that the courts have determined are appropriate and legal.
Manufacturers support reasonable environmental policies but need regulatory certainty to make necessary, long-term investments, and they believe both goals can be achieved through S. 2461. With the committee’s approval of the bill today, the measure will now proceed to the Senate for consideration.
“It’s logical. It’s common-sense. It’s a positive step and it will help bring back certainty to American manufacturers.”
The National Association of Manufacturers (NAM) represents the more than 12 million men and women who make things in America. Many of these workers are participants in what are known as multiemployer pension plans, and they are counting on these pension benefits for the safe and secure retirement they’ve earned. Yet, there is a looming crisis that carries potentially dire implications for millions of retirees as well as devastating consequences for thousands of businesses across the country. This is a problem that demands the right solutions, and quickly, and that is exactly why the NAM today submitted recommendations to the special committee in Congress charged with doing so.
Congress established the Joint Select Committee on Solvency of Multiemployer Pension Plans to find a solution to the multiemployer pension crisis. The crisis arose as the Great Recession cratered the holdings of longstanding pension plans and baby boomers began retiring en masse, so multiemployer pensions began having to pay more in benefits out of a decimated investment pool. The backstop that Congress created in 1974 to support retirees and workers in this type of pension crisis, called the Pension Benefit Guaranty Corporation (PBGC), is instead now teetering on the edge of insolvency itself. The combined impact of failing multiemployer plans and an insolvent PBGC Multiemployer Program is serious and, in the absence of congressional action to solve the problem today, could soon prove devastating for millions of Americans. That’s especially true for the 10 million participants and their families who rely on more than 1,400 plans in the multiemployer pension system.
This is why the NAM acted today to urge the Joint Select Committee to address the urgent, and worsening, multiemployer pension crisis. As we laid out in our letter, we believe that policymakers have a unique and historic opportunity to put the multiemployer pension system on a path to stability. And, by adhering to a few core principles, such as working expeditiously to address the urgent problems facing the system, crafting a comprehensive multiparty solution and protecting the healthy single-employer system throughout the process, we believe they can.
This is a huge challenge, but the Joint Select Committee and Congress can solve it. A comprehensive, bipartisan solution is within reach. So we urge policymakers to meet the moment with the swift, comprehensive and appropriate action that this crisis demands.