119-hr2988

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2988 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2988

To amend the Employee Retirement Income Security Act of 1974 to specify 
 requirements concerning the consideration of pecuniary and non-
 pecuniary factors, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 April 24, 2025

 Mr. Allen introduced the following bill; which was referred to the 
 Committee on Education and Workforce

_______________________________________________________________________

 A BILL

To amend the Employee Retirement Income Security Act of 1974 to specify 
 requirements concerning the consideration of pecuniary and non-
 pecuniary factors, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Protecting Prudent 
Investment of Retirement Savings Act''.

    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
 DIVISION A--INCREASE RETIREMENT EARNINGS

Sec. 1001. Short title.

Sec. 1002. Limitation on consideration of non-pecuniary factors by 
 fiduciaries.
 DIVISION B--NO DISCRIMINATION IN MY BENEFITS

Sec. 2001. Short title.

Sec. 2002. Service provider selection.
 DIVISION C--RETIREMENT PROXY PROTECTION

Sec. 3001. Short title.

Sec. 3002. Exercise of shareholder rights.
 DIVISION D--PROVIDING COMPLETE INFORMATION TO RETIREMENT INVESTORS

Sec. 4001. Short title.

Sec. 4002. Brokerage window disclosures.

 DIVISION A--INCREASE RETIREMENT EARNINGS

SEC. 1001. SHORT TITLE.

 This division may be cited as the ``Increase Retirement Earnings 
Act''.

SEC. 1002. LIMITATION ON CONSIDERATION OF NON-PECUNIARY FACTORS BY 
 FIDUCIARIES.

    (a) In General.--

Section 404

    (a) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104

    (a) ) is amended by adding at the 
end the following:
 ``

    (3) Interest Based on Pecuniary Factors.--
 ``
        (A) In general.--For purposes of paragraph

    (1) , a 
 fiduciary shall be considered to act solely in the interest of 
 the participants and beneficiaries of the plan with respect to 
 an investment or investment course of action only if the 
 fiduciary's action with respect to such investment or 
 investment course of action is based solely on pecuniary 
 factors (except as provided in subparagraph
        (B) ). The fiduciary 
 may not subordinate the interests of the participants and 
 beneficiaries in their retirement income or financial benefits 
 under the plan to other objectives and may not sacrifice 
 investment return or take on additional investment risk to 
 promote non-pecuniary benefits or goals. The weight given to 
 any pecuniary factor by a fiduciary shall reflect a prudent 
 assessment of the impact of such factor on risk and return.
 ``
        (B) Use of non-pecuniary factors for investment 
 alternatives.--Notwithstanding paragraph
        (A) , if a fiduciary is 
 unable to distinguish between or among investment alternatives 
 or investment courses of action on the basis of pecuniary 
 factors alone, the fiduciary may use non-pecuniary factors as 
 the deciding factor if the fiduciary documents--
 ``
            (i) why pecuniary factors were not sufficient to 
 select a plan investment or investment course of 
 action;
 ``
            (ii) how the selected investment compares to the 
 alternative investments with regard to the composition 
 of the portfolio with regard to diversification, the 
 liquidity and current return of the portfolio relative 
 to the anticipated cash flow requirements of the plan, 
 and the projected return of the portfolio relative to 
 the funding objectives of the plan; and
 ``
            (iii) how the selected non-pecuniary factor or 
 factors are consistent with the interests of the 
 participants and beneficiaries in their retirement 
 income or financial benefits under the plan.
 ``
            (C) Investment alternatives for participant-directed 
 individual account plans.--In selecting or retaining investment 
 options for a pension plan described in subsection
            (c) (1)
        (A) , a 
 fiduciary is not prohibited from considering, selecting, or 
 retaining an investment option on the basis that such 
 investment option promotes, seeks, or supports one or more non-
 pecuniary benefits or goals, if--
 ``
            (i) the fiduciary satisfies the requirements of 
 paragraph

    (1) and subparagraphs
        (A) and
        (B) of this 
 paragraph in selecting or retaining any such investment 
 option; and
 ``
            (ii) such investment option is not added or 
 retained as, or included as a component of, a default 
 investment under subsection
            (c) (5) (or any other 
 default investment alternative) if its investment 
 objectives or goals or its principal investment 
 strategies include, consider, or indicate the use of 
 one or more non-pecuniary factors.
 ``
            (D) === Definitions. ===
-For the purposes of this paragraph:
 ``
            (i) The term `pecuniary factor' means a factor 
 that a fiduciary prudently determines is expected to 
 have a material effect on the risk or return of an 
 investment based on appropriate investment horizons 
 consistent with the plan's investment objectives and 
 the funding policy established pursuant to 

section 402

    (b)

    (1) .
 ``
            (ii) The term `investment course of action' means 
 any series or program of investments or actions related 
 to a fiduciary's performance of the fiduciary's 
 investment duties, and includes the selection of an 
 investment fund as a plan investment, or in the case of 
 an individual account plan, a designated investment 
 alternative under the plan.''.

    (b) Effective Date.--The amendments made by this section shall 
apply to actions taken by a fiduciary on or after the date that is 12 
months after the date of enactment of this Act.

 DIVISION B--NO DISCRIMINATION IN MY BENEFITS

SEC. 2001. SHORT TITLE.

 This division may be cited as the ``No Discrimination in My 
Benefits Act''.

SEC. 2002. SERVICE PROVIDER SELECTION.

 

Section 404

    (a)

    (1) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1104

    (a)

    (1) ) is amended--

    (1) in subparagraph
            (C) , by striking ``and'';

    (2) in subparagraph
            (D) , by striking the period at the end 
 and inserting ``; and''; and

    (3) by adding at the end the following new subparagraph:
 ``
        (E) by selecting, monitoring, and retaining any 
 fiduciary, counsel, employee, or service provider of the plan--
 ``
            (i) in accordance with subparagraphs
        (A) and
        (B) ; 
 and
 ``
            (ii) without regard to race, color, religion, 
 sex, or national origin.''.

 DIVISION C--RETIREMENT PROXY PROTECTION

SEC. 3001. SHORT TITLE.

 This division may be cited as the ``Retirement Proxy Protection 
Act''.

SEC. 3002. EXERCISE OF SHAREHOLDER RIGHTS.

    (a) In General.--

Section 404 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104) is amended by adding at the end 
the following new subsection:
 ``

    (f) Exercise of Shareholder Rights.--
 ``

    (1) Authority to exercise shareholder rights.--
 ``
        (A) In general.--The fiduciary duty to manage 
 plan assets that are shares of stock includes the 
 management of shareholder rights appurtenant to those 
 shares, including the right to vote proxies. When 
 deciding whether to exercise a shareholder right and in 
 exercising such right, including the voting of proxies, 
 a fiduciary must act prudently and solely in the 
 interests of participants and beneficiaries and for the 
 exclusive purpose of providing benefits to participants 
 and beneficiaries and defraying the reasonable expenses 
 of administering the plan. The fiduciary duty to manage 
 shareholder rights appurtenant to shares of stock does 
 not require the voting of every proxy or the exercise 
 of every shareholder right.
 ``
        (B) Exception.--This subsection shall not apply 
 to voting, tender, and similar rights with respect to 
 qualifying employer securities or securities held in an 
 investment arrangement that is not a designated 
 investment alternative in the event such rights are 
 passed through pursuant to the terms of an individual 
 account plan to participants and beneficiaries with 
 accounts holding such securities.
 ``

    (2) Requirements for exercise of shareholder rights.--A 
 fiduciary, when deciding whether to exercise a shareholder 
 right and when exercising a shareholder right--
 ``
        (A) shall--
 ``
            (i) act solely in accordance with the 
 economic interest of the plan and its 
 participants and beneficiaries;
 ``
            (ii) consider any costs involved;
 ``
            (iii) evaluate material facts that form 
 the basis for any particular proxy vote or 
 exercise of shareholder rights; and
 ``
            (iv) maintain a record of any proxy vote, 
 proxy voting activity, or other exercise of a 
 shareholder right, including any attempt to 
 influence management; and
 ``
        (B) shall not subordinate the interests of 
 participants and beneficiaries in their retirement 
 income or financial benefits under the plan to any non-
 pecuniary objective, or promote non-pecuniary benefits 
 or goals unrelated to those financial interests of the 
 plan's participants and beneficiaries.
 ``

    (3) Monitoring.--A fiduciary shall exercise prudence and 
 diligence in the selection and monitoring of a person, if any, 
 selected to advise or otherwise assist with the exercise of 
 shareholder rights, including by providing research and 
 analysis, recommendations on exercise of proxy voting or other 
 shareholder rights, administrative services with respect to 
 voting proxies, and recordkeeping and reporting services.
 ``

    (4) Investment managers and proxy advisory firms.--Where 
 the authority to vote proxies or exercise other shareholder 
 rights has been delegated to an investment manager pursuant to 
 

section 403

    (a) , or a proxy voting advisory firm or other person 
 who performs advisory services as to the voting of proxies or 
 the exercise of other shareholder rights, a responsible plan 
 fiduciary shall prudently monitor the proxy voting activities 
 of such investment manager or advisory firm and determine 
 whether such activities are in compliance with paragraphs

    (1) and

    (2) .
 ``

    (5) Voting policies.--
 ``
        (A) In general.--In deciding whether to vote a 
 proxy pursuant to this subsection, the plan fiduciary 
 may adopt a proxy voting policy, including a safe 
 harbor proxy voting policy described in subparagraph
        (B) , providing that the authority to vote a proxy shall 
 be exercised pursuant to specific parameters designed 
 to serve the economic interest of the plan.
 ``
        (B) Safe harbor voting 

=== policy ===
-With respect to a 
 decision not to vote a proxy, a fiduciary shall satisfy 
 the fiduciary responsibilities under this subsection if 
 such fiduciary adopts and is following a safe harbor 
 proxy voting policy that--
 ``
            (i) limits voting resources to particular 
 types of proposals that the fiduciary has 
 prudently determined are substantially related 
 to the business activities of the issuer or are 
 expected to have a material effect on the value 
 of the plan investment; or
 ``
            (ii) establishes that the fiduciary will 
 refrain from voting on proposals or particular 
 types of proposals when the assets of a plan 
 invested in the issuer relative to the total 
 assets of such plan are below 5 percent (or, in 
 the event such assets are under management, 
 when the assets under management invested in 
 the issuer are below 5 percent of the total 
 assets under management).
 ``
            (C) Exception.--No proxy voting policy adopted 
 pursuant to this paragraph shall preclude a fiduciary 
 from submitting a proxy vote when the fiduciary 
 determines that the matter being voted on is expected 
 to have a material economic effect on the investment 
 performance of a plan's portfolio (or the investment 
 performance of assets under management in the case of 
 an investment manager); provided, however, that in all 
 cases compliance with a safe harbor voting policy shall 
 be presumed to satisfy fiduciary responsibilities with 
 respect to decisions not to vote.
 ``

    (6) Review.--A fiduciary shall periodically review any 
 policy adopted under this subsection.''.

    (b) Effective Date.--The amendments made by subsection

    (a) shall 
apply to an exercise of shareholder rights occurring on or after 
January 1, 2026.

 DIVISION D--PROVIDING COMPLETE INFORMATION TO RETIREMENT INVESTORS

SEC. 4001. SHORT TITLE.

 This division may be cited as the ``Providing Complete Information 
to Retirement Investors Act''.

SEC. 4002. BROKERAGE WINDOW DISCLOSURES.

    (a) In General.--

Section 404
            (c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104
            (c) ) is amended by adding at the 
end the following new paragraph:
 ``

    (7) Notice requirements for brokerage windows.--
 ``
        (A) In general.--In the case of a pension plan 
 which provides for individual accounts and which 
 provides a participant or beneficiary the opportunity 
 to choose from designated investment alternatives, a 
 participant or beneficiary shall not be treated as 
 exercising control over assets in the account of the 
 participant or beneficiary unless, with respect to any 
 investment arrangement that is not a designated 
 investment alternative, each time before such a 
 participant or beneficiary directs an investment into, 
 out of, or within such investment arrangement, such 
 participant is notified of, and acknowledges, each 
 element of the notice described under paragraph
        (B) .
 ``
        (B) Notice.--The notice described under this 
 paragraph is a four part information that is 
 substantially similar to the following information:

``1. Your retirement plan offers designated investment alternatives prudently selected and monitored by
 fiduciaries for the purpose of enabling you to construct an appropriate retirement savings portfolio. In
 selecting and monitoring designated investment alternatives, your plan's fiduciary considers the risk of loss
 and the opportunity for gain (or other return) compared with reasonably available investment alternatives.
2. The investments available through this investment arrangement are not designated investment alternatives, and
 have not been prudently selected and are not monitored by a plan fiduciary.
3. Depending on the investments you select through this investment arrangement, you may experience diminished
 returns, higher fees, and higher risk than if you select from the plan's designated investment alternatives.
4. The following is a hypothetical illustration of the impact of return at 4 percent, 6 percent, and 8 percent
 on your account balance projected to age 67.

 ``
            (C) Illustration.--The notice described under 
 paragraph
        (B) shall also include a graph displaying the 
 projected retirement balances of such participant or 
 beneficiary at age 67 if the account of such individual 
 were to achieve an annual return equal to each of the 
 following:
 ``
            (i) 4 percent.
 ``
            (ii) 6 percent.
 ``
            (iii) 8 percent.''.

    (b) Designated Investment Alternative Defined.--

Section 3 of such 
Act (29 U.S.C. 1002) is amended by adding at the end the following new 
paragraph:
 ``

    (46) Designated investment alternative.--
 ``
        (A) In general.--The term `designated investment 
 alternative' means any investment alternative 
 designated by a responsible fiduciary of an individual 
 account plan described in subsection 404
            (c) into which 
 participants and beneficiaries may direct the 
 investment of assets held in, or contributed to, their 
 individual accounts.
 ``
        (B) Exception.--The term `designated investment 
 alternative' does not include brokerage windows, self-
 directed brokerage accounts, or similar plan 
 arrangements that enable participants and beneficiaries 
 to select investments beyond those designated by a 
 responsible plan fiduciary.''.
            (c) Effective Date.--The amendment made by subsection

    (a) shall 
take effect on January 1, 2027.
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