H.R. 2988

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2988 Referred in Senate (RFS)]

<DOC>
119th CONGRESS
2d Session
H. R. 2988

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

January 26 (legislative day, January 15), 2026

Received; read twice and referred to the Committee on Health, 
Education, Labor, and Pensions

_______________________________________________________________________

AN ACT

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.
Sec. 4003. GAO study of brokerage accounts.

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 follows 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.

SEC. 4003. GAO STUDY OF BROKERAGE ACCOUNTS.

Not later than 2 years after the date of enactment of this Act, the 
Comptroller General shall submit a report to Congress comparing the 
returns generated by any investment arrangement that--
(1) is not a designated investment alternative (as defined 
in section 2(46) of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1002(46));
(2) is subject to section 404(c)(7) of such Act (29 U.S.C 
1104(c)(7)); and
(3) is available in defined contribution plans (as defined 
in section 3(34) of such Act (29 U.S.C. 1002(34))
with the returns generated by other investment options available in 
such plans.

Passed the House of Representatives January 15, 2026.

Attest:

KEVIN F. MCCUMBER,

Clerk.