,,ib ,union ,calendar ,no4 #cfg #aaith ,,congress #ast ,session ,h4 ,r4 #bihh ,report ,no4 #aai-dba ,,in ,,the ,,house ,,of ,,representatives ,april #bd1 #bjbe,mr4 ,allen introduced the following bill2 which was referred to the ,committee on ,education and ,workforce ,december #cj1 #bjbe,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed,strike out all after the enacting clause and insert the part printed in italic,for text of introduced bill1 see copy of bill as introduced on ,april #bd1 #bjbe ,a ,,bill ,to amend the ,employee ,retirement ,income ,security ,act of #aigd to specify requirements concerning the consideration of pecuniary and non-pecuniary factors1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,protecting ,prudent ,investment of ,retirement ,savings ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,division ,a--,increase ,retirement ,earnings,sec4 #ajja4 ,short title4,sec4 #ajjb4 ,limitation on consideration of non-pecuniary factors by fiduciaries4,division ,b--,no ,discrimination in ,my ,benefits,sec4 #bjja4 ,short title4,sec4 #bjjb4 ,service provider selection4,division ,c--,retirement ,proxy ,protection,sec4 #cjja4 ,short title4,sec4 #cjjb4 ,exercise of shareholder rights4,division ,d--,providing ,complete ,information to ,retirement ,investors ,sec4 #djja4 ,short title4,sec4 #djjb4 ,brokerage window disclosures4 ,a ,increase ,retirement ,earnings #ajja4 ,short title ,this division may be cited as the ,increase ,retirement ,earnings ,act4 #ajjb4 ,limitation on consideration of non-pecuniary factors by fiduciaries 7a7 ,in general ,section #djd7;a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;a77 is amended by adding at the end the following3 7#c7 ,interest based on pecuniary factors 7,a7 ,in general ,for purposes of paragraph 7#a71 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 7except as provided in subparagraph 7,b774 ,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 goals4 ,the weight given to any pecuniary factor by a fiduciary shall reflect a prudent assessment of the impact of such factor on risk and return4 7,b7 ,use of non-pecuniary factors for investment alternatives ,notwithstanding paragraph 7,a71 if a fiduciary is unable to distinguish between or among investment alternatives or investment courses of action on the basis of pecuniary factors alone1 the fiduciary may use non-pecuniary factors as the deciding factor if the fiduciary documents-- 7i7 why pecuniary factors were not sufficient to select a plan investment or investment course of action2 7ii7 how the selected investment compares to the alternative investments with regard to the composition of the portfolio with regard to diversification1 the liquidity and current return of the portfolio relative to the anticipated cash flow requirements of the plan1 and the projected return of the portfolio relative to the funding objectives of the plan2 and 7iii7 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 plan4 7,c7 ,investment alternatives for participant-directed individual account plans ,in selecting or retaining investment options for a pension plan described in subsection 7c77#a77;,a71 a fiduciary is not prohibited from considering1 selecting1 or retaining an investment option on the basis that such investment option promotes1 seeks1 or supports one or more non-pecuniary benefits or goals1 if-- 7i7 the fiduciary satisfies the requirements of paragraph 7#a7 and subparagraphs 7,a7 and 7,b7 of this paragraph in selecting or retaining any such investment option2 and 7ii7 such investment option is not added or retained as1 or included as a component of1 a default investment under subsection 7c77#e7 7or any other default investment alternative7 if its investment objectives or goals or its principal investment strategies include1 consider1 or indicate the use of one or more non-pecuniary factors4 7,d7 ,definitions ,for the purposes of this paragraph3 7i7 ,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 #djb7;b77#a74 7ii7 ,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 duties1 and includes the selection of an investment fund as a plan investment1 or in the case of an individual account plan1 a designated investment alternative under the plan4 4 7b7 ,effective date ,the amendments made by this section shall apply to actions taken by a fiduciary on or after the date that is #ab months after the date of enactment of this ,act4 ,b ,no ,discrimination in ,my ,benefits #bjja4 ,short title ,this division may be cited as the ,no ,discrimination in ,my ,benefits ,act4 #bjjb4 ,service provider selection ,section #djd7;a77#a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;a77#a77 is amended-- 7#a7 in subparagraph 7,c71 by striking and2 7#b7 in subparagraph 7,d71 by striking the period at the end and inserting 2 and2 and 7#c7 by adding at the end the following new subparagraph3 7,e7 by selecting1 monitoring1 and retaining any fiduciary1 counsel1 employee1 or service provider of the plan-- 7i7 in accordance with subparagraphs 7,a7 and 7,b72 and 7ii7 without regard to race1 color1 religion1 sex1 or national origin4 4 ,c ,retirement ,proxy ,protection #cjja4 ,short title ,this division may be cited as the ,retirement ,proxy ,protection ,act4 #cjjb4 ,exercise of shareholder rights 7a7 ,in general ,section #djd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7 is amended by adding at the end the following new subsection3 7f7 ,exercise of shareholder rights 7#a7 ,authority to exercise shareholder rights 7,a7 ,in general ,the fiduciary duty to manage plan assets that are shares of stock includes the management of shareholder rights appurtenant to those shares1 including the right to vote proxies4 ,when deciding whether to exercise a shareholder right and in exercising such right1 including the voting of proxies1 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 plan4 ,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 right4 7,b7 ,exception ,this subsection shall not apply to voting1 tender1 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 securities4 7#b7 ,requirements for exercise of shareholder rights ,a fiduciary1 when deciding whether to exercise a shareholder right and when exercising a shareholder right-- 7,a7 shall-- 7i7 act solely in accordance with the economic interest of the plan and its participants and beneficiaries2 7ii7 consider any costs involved2 7iii7 evaluate material facts that form the basis for any particular proxy vote or exercise of shareholder rights2 and 7iv7 maintain a record of any proxy vote1 proxy voting activity1 or other exercise of a shareholder right1 including any attempt to influence management2 and 7,b7 shall not subordinate the interests of participants and beneficiaries in their retirement income or financial benefits under the plan to any non-pecuniary objective1 or promote non-pecuniary benefits or goals unrelated to those financial interests of the plan's participants and beneficiaries4 7#c7 ,monitoring ,a fiduciary shall exercise prudence and diligence in the selection and monitoring of a person1 if any1 selected to advise or otherwise assist with the exercise of shareholder rights1 including by providing research and analysis1 recommendations on exercise of proxy voting or other shareholder rights1 administrative services with respect to voting proxies1 and recordkeeping and reporting services4 7#d7 ,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 #djc7;a71 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 rights1 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 7#a7 and 7#b74 7#e7 ,voting policies 7,a7 ,in general ,in deciding whether to vote a proxy pursuant to this subsection1 the plan fiduciary may adopt a proxy voting policy1 including a safe harbor proxy voting policy described in subparagraph 7,b71 providing that the authority to vote a proxy shall be exercised pursuant to specific parameters designed to serve the economic interest of the plan4 7,b7 ,safe harbor voting policy ,with respect to a decision not to vote a proxy1 a fiduciary shall satisfy the fiduciary responsibilities under this subsection if such fiduciary adopts and follows a safe harbor proxy voting policy that-- 7i7 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 investment2 or 7ii7 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 #e percent 7or1 in the event such assets are under management1 when the assets under management invested in the issuer are below #e percent of the total assets under management74 7,c7 ,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 7or the investment performance of assets under management in the case of an investment manager72 provided1 however1 that in all cases compliance with a safe harbor voting policy shall be presumed to satisfy fiduciary responsibilities with respect to decisions not to vote4 7#f7 ,review ,a fiduciary shall periodically review any policy adopted under this subsection4 4 7b7 ,effective date ,the amendments made by subsection 7a7 shall apply to an exercise of shareholder rights occurring on or after ,january #a1 #bjbf4 ,d ,providing ,complete ,information to ,retirement ,investors #djja4 ,short title ,this division may be cited as the ,providing ,complete ,information to ,retirement ,investors ,act4 #djjb4 ,brokerage window disclosures 7a7 ,in general ,section #djd7;c7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;c77 is amended by adding at the end the following new paragraph3 7#g7 ,notice requirements for brokerage windows 7,a7 ,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 alternatives1 a participant or beneficiary shall not be treated as exercising control over assets in the account of the participant or beneficiary unless1 with respect to any investment arrangement that is not a designated investment alternative1 each time before such a participant or beneficiary directs an investment into1 out of1 or within such investment arrangement1 such participant is notified of1 and acknowledges1 each element of the notice described under paragraph 7,b74 7,b7 ,notice ,the notice described under this paragraph is a four part information that is substantially similar to the following information3 #a4 ,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 portfolio4 ,in selecting and monitoring designated investment alternatives1 your plan's fiduciary considers the risk of loss and the opportunity for gain 7or other return7 compared with reasonably available investment alternatives4#b4 ,the investments available through this investment arrangement are not designated investment alternatives1 and have not been prudently selected and are not monitored by a plan fiduciary4#c4 ,depending on the investments you select through this investment arrangement1 you may experience diminished returns1 higher fees1 and higher risk than if you select from the plan's designated investment alternatives4#d4 ,the following is a hypothetical illustration of the impact of return at #d percent1 #f percent1 and #h percent on your account balance projected to age #fg4 7,c7 ,illustration ,the notice described under paragraph 7,b7 shall also include a graph displaying the projected retirement balances of such participant or beneficiary at age #fg if the account of such individual were to achieve an annual return equal to each of the following3 7i7 #d percent4 7ii7 #f percent4 7iii7 #h percent4 4 7b7 ,designated investment alternative defined ,section #c of such ,act 7#bi ,u4,s4,c4 #ajjb7 is amended by adding at the end the following new paragraph3 7#df7 ,designated investment alternative 7,a7 ,in general ,the term designated investment alternative means any investment alternative designated by a responsible fiduciary of an individual account plan described in subsection #djd7;c7 into which participants and beneficiaries may direct the investment of assets held in1 or contributed to1 their individual accounts4 7,b7 ,exception ,the term designated investment alternative does not include brokerage windows1 self-directed brokerage accounts1 or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by a responsible plan fiduciary4 4 7c7 ,effective date ,the amendment made by subsection 7a7 shall take effect on ,january #a1 #bjbg4 ,december #cj1 #bjbe,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed