Senator Jim Banks (R., Ind.) is introducing legislation to prevent American retirement plans from supporting foreign adversaries.
Banks’s legislation, the Protecting Americans’ Retirement Savings Act, would prohibit American 401 (k)s and other retirement plans from funding companies based in China, Russia, Iran, and other adversarial countries, National Review has learned.
“Many Americans’ retirement plans wrongly fund the militaries of our adversaries or foreign companies that aid in human rights abuses. My bill would prevent these misguided investments and guarantee that Wall Street execs aren’t bankrolling our adversaries with the retirement funds of hardworking Americans,” Banks said in a statement to NR.
A military veteran, Banks has been a China hawk for his entire career, first in the House and now in the Senate. Banks was part of the House Select Committee on the Chinese Communist Party during his final term in the chamber last congress.
Banks’s bill prevents managers of retirement plans covered by the Employee Retirement Income Security Act of 1974 from acquiring interest in, lending to, engaging in transactions with, and transferring data plans to companies under the control of foreign adversaries. These companies typically report false financial data and are routinely used to advance their host nations’s geopolitical interests at the expense of U.S. foreign policy.
The Protecting Americans’ Retirement Savings Act only applies to future investments and does not require divestments from existing investments and contracts. But the legislation does mandate fiduciaries to disclose all assets invested in sanctioned entities and a list of investments in foreign adversary companies. It also instructs fiduciaries to divulge the total value of those investments and provide an explanation for why the retirement plan holds the investment.
Banks’s legislation is aligned with President Donald Trump’s “America First Investment Policy” national security memo. The directive lays out Trump’s goals for incentivizing private sector investment in the U.S. and creating new rules to stop U.S. investors from advancing China’s military-civil fusion strategy. The Chinese Communist Party’s military-civil fusion policy is its blueprint for developing the People’s Liberation Army into a world-class military by merging China’s civil research and development sector with its defense industry.
Trump’s policy seeks to have investors put their money into U.S. companies rather than Chinese competitors. One way Trump hopes to facilitate U.S. investment is to “restore the highest fiduciary standards as required by the Employee Retirement Security Act of 1974, seeking to ensure that foreign adversary companies are ineligible for pension plan contributions.”
American pension funds have invested at least $70 billion into companies based in China and Hong Kong, according to a 2023 analysis from the non-partisan Future Union, an advocacy group for private sector investments in democratic countries. The pensions funds are invested in Chinese behemoths including TikTok parent company ByteDance, Tencent, and Alibaba, Future Union determined based on public and private data.