,,ii  #aai? ,,congress  #a/ ,session    
,s4 #cjhf  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,octob] #cj1 #bjbe ,mr4
 ,cassidy 7= himself & ,mr4 ,banks7     
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,heal?1 ,education1 ,labor1 & ,p5sions  
,a ,,bill  ,to am5d ! ,employee         
,retirem5t ,income ,security ,act (     
#aigd to cl>ify ! crit]ia by :i* a      
fiduci>y may evaluate & select inve/m5ts
 bas$ on nonpecuni>y factors1 & to      
cl>ify ! application ( prud5ce &        
exclusive purpose duties to ! ex]cise ( 
%>ehold] rights4  #a4  ,%ort title  ,?is
 ,act may be cit$ z ! ,re/or+ ,integrity
 9 ,fiduci>y ,duty ,act4  #b4  ,ex]cise 
( fiduci>y duty 9 evaluat+ & select+    
inve/m5ts  7a7  ,9 g5]al  ,section      
#djd7;a7 ( ! ,employee ,retirem5t       
,income ,security ,act ( #aigd 7#bi     
,u4,s4,c4 #aajd7;a771 is am5d$ by add+  
at ! end ! foll[+3  7#c7  ,inve/m5ts    
bas$ on pecuni>y factors  7,a7  ,9 g5]al
  ,= ! purposes ( p>agraph 7#a71 a      

fiduci>y-- 7i7 may evaluate an inve/m5t 
or inve/m5t c\rse ( action bas$ only on 
pecuni>y factors1 except z provid$ 9    
subp>agraph 7,b72  7ii7 may n subord9ate
 ! int]e/s ( ! p>ticipants & b5efici>ies
 9 _! retirem5t income or f9ancial      
b5efits "u ! plan to o!r objectives2    
7iii7 may n sacrifice inve/m5t return or
 take on additional inve/m5t risk to    
promote nonpecuni>y b5efits or goals2 & 
7iv7 %all weight ea* pecuni>y factor 9 a
 mann] t appropriately reflects a prud5t
 assessm5t ( ! impact ( ! factor on risk
 & return4  7,b7  ,use ( nonpecuni>y    
factors = inve/m5t alt]natives  ,not)/&+
 subp>agraph 7,a71 :5 *oos+ betwe5 or   
among inve/m5t alt]natives1 if a        
fiduci>y is unable to di/+ui% betwe5 or 
among inve/m5t alt]natives or inve/m5t  
c\rses ( action on ! basis ( pecuni>y   
factors alone1 ! fiduci>y %all use !    
capita aut navia /&>d z ! decid+ factor 
9 ! inve/m5t decision1 provid$ t--  7i7 
! fiduci>y docum5ts detail--  7,i7 :y   
pecuni>y factors 7 n suffici5t to select

 ! inve/m5t or inve/m5t c\rse ( action2 
7,,ii7 h[ ! select$ inve/m5t comp>es to 
! alt]native inve/m5ts ) reg>d to !     
composition ( ! portfolio ) reg>d to    
div]sification1 ! liquidity1 curr5t     
return ( ! portfolio relative to !      
anticipat$ ca% fl[ requirem5ts ( ! plan1
 & ! project$ return ( ! portfolio      
relative to ! fund+ objectives ( ! plan2
 &  7,,iii7 h[ ! select$ inve/m5t is    
consi/5t ) ! int]e/s ( ! p>ticipants &  
b5efici>ies 9 _! retirem5t income or    
f9ancial b5efits "u ! plan2 &  7ii7 !   
fiduci>y demon/rates t x did n exp5d any
 res\rces dur+ ! inve/m5t c\rse ( action
 on nonpecuni>y factors t place weight  
betwe5 or among inve/m5t alt]natives = !
 purpose ( ! inve/m5t decision4  7,c7   
,inve/m5t alt]natives =                 
p>ticipant-direct$ individual acc\nt    
plans  ,9 select+ or reta9+ inve/m5t    
options = a p5sion plan describ$ 9      
subsection 7c77#a77;,a71 a fiduci>y may 
consid]1 select1 or reta9 an inve/m5t   
option on ! basis t su* inve/m5t option 

promotes1 seeks1 or supports #a or m    
nonpecuni>y b5efits or goals1 only if-- 
7i7 ! fiduci>y satisfies ! requirem5ts (
 p>agraph 7#a7 & subp>agraphs 7,a7 &    
7,b7 ( ?is p>agraph 9 select+ or reta9+ 
any su* inve/m5t option2 &  7ii7 su*    
inve/m5t option is n add$ or reta9$ z1  
or includ$ z a compon5t (1 a default    
inve/m5t describ$ 9 subsection 7c77#e7  
7or any o!r default inve/m5t            
alt]native74  7,d7  ,def9itions  ,= !   
purposes ( ?is p>agraph3 7i7 ,capita aut
 navia ,! t]m capita aut navia means a  
/&>d by :i* a fiduci>y *ooses at r&om   
betwe5 or among inve/m5t alt]natives :]e
 pecuni>y factors are equal & does n    
give add$ weight to #a inve/m5t or      
ano!r1 provid$ t ! inve/m5t alt]natives 
h id5tical risk & return attributes &   
*oos+ among ! inve/m5t alt]natives w\ld 
h comp>atively negligible impact1 n     
consid]+ liquidity con/ra9ts or         
transaction co/s4  7ii7  ,inve/m5t c\rse
 ( action  ,! t]m inve/m5t c\rse (      
action means any s]ies or program (     

inve/m5ts or actions relat$ to a        
fiduci>y's p]=mance ( ! fiduci>y's      
inve/m5t duties1 & includes ! selection 
( an inve/m5t fund z a plan inve/m5t1 or
 9 ! case ( a plan describ$ 9 subsection
 7c77#a77;,a71 a designat$ inve/m5t     
alt]native "u ! plan4  7iii7  ,mat]ial  
,! t]m mat]ial1 :5 us$ to qualify a     
f9ancial risk or f9ancial return--  7,i7
 means a f9ancial risk or f9ancial      
return 9 :i* !re is a sub/antial        
likelihood t a reasonable inve/or w\ld  
atta* importance :5--  7aa7 evaluat+ !  
pot5tial f9ancial risks or returns ( an 
exi/+ or prospective inve/m5t2 or  7bb7 
ex]cis+1 or decl9+ to ex]cise1 any      
rights ) respect to securities2 &       
7,,ii7 does n include fur!r+            
nonpecuni>y1 environm5tal1 social1      
political1 ideological1 or o!r goals or 
objectives4  7iv7  ,pecuni>y factor  ,! 
t]m pecuni>y factor means a factor t a  
fiduci>y prud5tly det]m9es is expect$ to
 h a mat]ial effect on ! risk or return 
( an inve/m5t bas$ on appropriate       

inve/m5t horizons consi/5t ) ! plan's   
inve/m5t objectives & ! fund+ policy    
e/abli%$ pursuant to section            
#djb7;b77#a74  4  7b7  ,effective date  
,! am5dm5ts made by ?is section %all    
apply to actions tak5 by a fiduci>y on  
or aft] ! date t is #a ye> aft] ! date (
 enactm5t ( ?is ,act4  #c4  ,ex]cise (  
%>ehold] rights  7a7  ,9 g5]al  ,section
 #djd ( ! ,employee ,retirem5t ,income  
,security ,act ( #aigd 7#bi ,u4,s4,c4   
#aajd7 is am5d$ by add+ at ! end !      
foll[+ new subsection3  7f7  ,ex]cise ( 
%>ehold] rights  7#a7  ,au?ority to     
ex]cise %>ehold] rights  7,a7  ,9 g5]al 
,! fiduci>y duty to manage plan assets t
 are %>es ( /ock includes ! managem5t ( 
%>ehold] rights appurt5ant to ^? %>es1  
includ+ ! "r to vote proxies4 ,:5 decid+
 :e!r to ex]cise a %>ehold] "r & 9      
ex]cis+ su* "r1 includ+ ! vot+ (        
proxies1 a fiduci>y %all act prud5tly & 
solely 9 ! int]e/s ( p>ticipants &      
b5efici>ies & = ! exclusive purpose (   
provid+ b5efits to p>ticipants &        

b5efici>ies & defray+ ! reasonable      
exp5ses ( adm9i/]+ ! plan4 ,! fiduci>y  
duty to manage %>ehold] rights          
appurt5ant to %>es ( /ock does n require
 ! vot+ ( e proxy or ! ex]cise ( e      
%>ehold] "r4  7,b7  ,exception  ,?is    
subsection %all n apply to vot+1 t5d]1 &
 simil> rights ) respect to securities t
 are pass$ ?r\gh pursuant to ! t]ms ( an
 individual acc\nt plan to p>ticipants &
 b5efici>ies ) acc\nts hold+ su*        
securities4  7#b7  ,requirem5ts =       
ex]cise ( %>ehold] rights  ,a fiduci>y1 
:5 decid+ :e!r to ex]cise a %>ehold] "r 
& :5 ex]cis+ a %>ehold] "r--  7,a7      
%all-- 7i7 act solely 9 accordance ) !  
economic int]e/ ( ! plan & its          
p>ticipants & b5efici>ies2  7ii7 consid]
 any co/s involv$2  7iii7 evaluate      
mat]ial facts t =m ! basis = any        
p>ticul> proxy vote or ex]cise (        
%>ehold] rights2 &  7iv7 ma9ta9 a record
 ( any proxy vote1 proxy vot+ activity1 
or o!r ex]cise ( a %>ehold] "r1 includ+ 
any attempt to influ5ce managem5t2 &    

7,b7 %all n subord9ate ! int]e/s (      
p>ticipants & b5efici>ies 9 _! retirem5t
 income or f9ancial b5efits "u ! plan to
 any nonpecuni>y objective1 or promote  
nonpecuni>y b5efits or goals unrelat$ to
 ^? f9ancial int]e/s ( ! plan's         
p>ticipants & b5efici>ies4  7#c7        
,monitor+  ,a fiduci>y %all ex]cise     
prud5ce & dilig5ce 9 ! selection &      
monitor+ ( a p]son1 if any1 select$ to  
advise or o!rwise assi/ ) ! ex]cise (   
%>ehold] rights1 includ+ by provid+     
rese>* & analysis1 recomm5dations on    
ex]cise ( proxy vot+ or o!r %>ehold]    
rights1 adm9i/rative s]vices ) respect  
to vot+ proxies1 & recordkeep+ & report+
 s]vices4  7#d7  ,inve/m5t manag]s &    
proxy advisory firms  ,:]e ! au?ority to
 vote proxies or ex]cise o!r %>ehold]   
rights has be5 delegat$ to an inve/m5t  
manag] pursuant to section #djc7;a71 or 
a proxy vot+ advisory firm or o!r p]son 
:o p]=ms advisory s]vices z to ! vot+ ( 
proxies or ! ex]cise ( o!r %>ehold]     
rights1 a responsible plan fiduci>y %all

 prud5tly monitor ! proxy vot+          
activities ( su* inve/m5t manag] or     
advisory firm & det]m9e :e!r su*        
activities are 9 compliance ) p>agraphs 
7#a7 & 7#b74  7#e7  ,vot+ policies  7,a7
  ,9 g5]al  ,9 decid+ :e!r to vote a    
proxy pursuant to ?is subsection1 ! plan
 fiduci>y may adopt a proxy vot+ policy1
 includ+ a safe h>bor proxy vot+ policy 
describ$ 9 subp>agraph 7,b71 provid+ t !
 au?ority to vote a proxy %all be       
ex]cis$ pursuant to specific p>amet]s   
design$ to s]ve ! economic int]e/ ( !   
plan4  7,b7  ,safe h>bor vot+ policy  ,)
 respect to a decision n to vote a      
proxy1 a fiduci>y %all satisfy !        
fiduci>y responsibilities "u ?is        
subsection if su* fiduci>y adopts & is  
foll[+ a safe h>bor proxy vot+ policy   
t--  7i7 limits vot+ res\rces to        
p>ticul> types ( proposals t ! fiduci>y 
has prud5tly det]m9$ are sub/antially   
relat$ to ! bus9ess activities ( ! issu]
 or are expect$ to h a mat]ial effect on
 ! value ( ! plan inve/m5t2 or  7ii7    

e/abli%es t ! fiduci>y w refra9 f vot+  
on proposals or p>ticul> types (        
proposals :5 ! assets ( a plan inve/$ 9 
! issu] relative to ! total assets ( su*
 plan are bel[ #e p]c5t 7or1 9 ! ev5t   
su* assets are "u managem5t1 :5 ! assets
 "u managem5t inve/$ 9 ! issu] are bel[ 
#e p]c5t ( ! total assets "u managem5t74
  7,c7  ,exception  ,no proxy vot+      
policy adopt$ pursuant to ?is p>agraph  
%all preclude a fiduci>y f submitt+ a   
proxy vote :5 ! fiduci>y det]m9es t !   
matt] be+ vot$ on is expect$ to h a     
mat]ial economic effect on ! inve/m5t   
p]=mance ( a plan's portfolio 7or !     
inve/m5t p]=mance ( assets "u managem5t 
9 ! case ( an inve/m5t manag]72 provid$1
 h[ev]1 t 9 all cases compliance ) a    
safe h>bor vot+ policy %all be presum$  
to satisfy fiduci>y responsibilities )  
respect to decisions n to vote4  7#f7   
,review  ,a fiduci>y %all p]iodically   
review any policy adopt$ "u ?is         
subsection4  4  7b7  ,effective date  ,!
 am5dm5ts made by subsection 7a7 %all   

apply to an ex]cise ( %>ehold] rights   
occurr+ on or aft] ,janu>y #a1 #bjbf4