In committee
Protecting Prudent Investment of Retirement Savings Act
This bill requires managers of private-sector retirement plans, such as 401(k)s, to focus strictly on financial risk and return when investing savings, casting shareholder proxy votes, and hiring service providers. It restricts the use of environmental, social, or political factors in managing retirement money and prohibits funds with non-financial goals from being used as automatic default investments for employees. Additionally, workers who invest through self-directed brokerage windows outside the plan's core menu would have to review and acknowledge financial risk notices and retirement projections before transferring funds.
People affected—Not determinable from the text provided; applies broadly to ERISA plan fiduciaries, service providers, and retirement plan participants, but names no specific population count.
Fiscal magnitude—Not determinable from the text provided; the bill specifies no appropriations, authorizations, or direct financial amounts.
Reach64provisional · pending reviewrigor: heuristic llm
What this bill touches.
Market protections+35Race-conscious policy−30Banking/financial rules+35Workplace standards+30
Who it helps · who it burdens.
Who it helps
- retirement plan participants and beneficiariesGain statutory protections ensuring their retirement savings and proxy votes are managed solely for their economic benefit rather than outside goals, and receive projection graphs and disclosures before using self-directed brokerage accounts (Sec. 1002(a), 3002(a), 4002(a)).
Who it burdens
- proxy advisory firms and investment managersSubject to mandatory monitoring by plan fiduciaries to ensure their voting recommendations and management activities follow strict economic-interest standards rather than non-financial goals (Sec. 3002(a)(f)(3)-(4)).
- plan participants using self-directed brokerage windowsMust receive and formally acknowledge a multi-part disclosure notice and return projection graph every time they move money into, out of, or within a self-directed brokerage window (Sec. 4002(a)(7)(A)).
- Government Accountability OfficeMust conduct a study and submit a report to Congress within two years comparing the investment returns of self-directed brokerage arrangements in defined contribution plans (Sec. 4003).
- ERISA retirement plan fiduciariesMust base investment decisions and proxy voting strictly on pecuniary factors affecting risk and return, maintain written records justifying any non-financial tiebreaker, prudently monitor proxy advisory firms, and obtain acknowledgements before participants use self-directed brokerage windows (Sec. 1002, 2002, 3002, 4002).
Who opposes it
- investment funds pursuing non-pecuniary goalsAre barred from serving as default investment options for retirement plans and face strict restrictions preventing fiduciaries from selecting them if they sacrifice financial returns or add risk (Sec. 1002(a)(3)).