APSR president sees politics threatening retirement security

In an opinion piece published in RealClear Markets, APSR president Tim Hill highlighted a troubling ruling from U.S. District Court Judge Reed O’Connor , which found American Airlines breached its fiduciary responsibility to participants in its retirement plan by using BlackRock as an asset manager.

Hill noted this ruling in the class-action lawsuit “illustrates the damage that can happen when politics are injected into decision-making about retirement assets.”

He went on to point out that the decision could set back retirement plans and open up the door for other politically motivated lawsuits, “This suit is just one of many examples of how partisan groups seeking to score points by demonizing ESG are imposing political litmus tests on firms managing retirement assets — substituting their views for the wisdom of the free market. By federal law, American Airlines and other employers are already required to place the financial interests of their retirement plan participants above other considerations. Eliminating large investment managers who offer well-regarded funds at rock-bottom costs hardly seems like a recipe for ensuring workers’ retirement security.”

Not only that, but it has the potential to strengthen similar efforts by state governments. APSR has been documenting the actions of states that have strayed from fiduciary principles of investment to win political points — and that list continues to grow in 2025.

“The American Airlines case shows how the politicization of investment management is creating a confusing patchwork of rules across states and opens the door to further lawsuits,” Hill stated. “What’s to stop someone from filing a similar claim against any 401(k)-plan sponsor across the country?”

Increasing turmoil in public and private retirement plans will only add to the retirement crisis. As the availability of pensions diminishes and the security of those that remain are tested, workers will need to find other avenues of savings.

“Getting the best return on retirement savings should be the sole focus for all fund managers — whether it’s a private company or public pension,” Hill noted. “That means choosing the best investments run by the most qualified professionals.”

Financial security should never be a partisan issue.

Read Tim Hill’s full piece in RealClear Markets.