[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9198 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 9198
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to limit fiduciary consideration of non-
pecuniary factors in investment decision-making.
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IN THE HOUSE OF REPRESENTATIVES
October 18, 2022
Mr. Murphy of North Carolina (for himself, Mrs. Miller of West
Virginia, Mr. Schweikert, and Mr. Smucker) introduced the following
bill; which was referred to the Committee on Education and Labor, and
in addition to the Committee on Ways and Means, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
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A BILL
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to limit fiduciary consideration of non-
pecuniary factors in investment decision-making.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. FIDUCIARY RESPONSIBILITIES RELATING TO CERTAIN NON-PECUNIARY
OBJECTIVES.
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
new paragraph:
``(3) Interest Based on Non-Pecuniary Factors.--
``(A) In general.--For purposes of paragraph (1), a
fiduciary of a plan shall be considered to act solely in the
interest of the participants and beneficiaries of the plan with
respect to a plan investment or investment course of action
only if the fiduciary's action with respect to such investment
is based only on pecuniary factors. 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 should appropriately reflect a prudent assessment
of the impact of such factor on risk-return.
``(B) Investment alternatives for participant-directed
individual account plans.--In selecting investment options for
a pension plan described in subsection (c)(1)(A), a fiduciary
is not prohibited from considering or including an investment
option on the basis that such investment option promotes non-
pecuniary benefits or goals, provided that the fiduciary--
``(i) satisfies the requirements of paragraph (1)
and subparagraph (A) in considering or including any
such investment option; and
``(ii) does not consider or include such investment
option as a default investment (as defined in the
regulations issued by the Secretary under subsection
(c)(5)(A)), or a component thereof.
``(C) Pecuniary factor defined.--For the purposes of this
paragraph, the term `pecuniary factor' means a factor that a
fiduciary prudently determines is expected to have a material
effect on the risk and 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).''.
SEC. 2. REQUIREMENT THAT RETIREMENT PLANS CONTINUE TO OFFER INVESTMENTS
BASED SOLELY ON PECUNIARY FACTORS.
(a) In General.--Section 401(a) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(39) Defined contribution plan investment option
requirements.--In the case of a trust forming part of a defined
contribution plan which includes investment options based on
non-pecuniary factors (within the meaning of section 404(a)(3)
of the Employee Retirement Income Security Act of 1974), such
trust shall not constitute a qualified trust unless the plan
includes investment options not based on any such factors.''.
(b) 403(b) Plans.--Section 403(b)(7) of such Code is amended by
adding at the end the following new subparagraph:
``(D) Investment option requirements.--Subparagraph
(A) shall not apply to an amount unless under the
custodial account meets investment option requirements
similar to the requirements of section 401(a)(39).''.
(c) 457(b) Plans.--Section 457(e) of such Code is amended by adding
at the end the following new paragraph:
``(19) Investment option requirements.--In the case of an
employer described in subsection (e)(1)(A), a plan shall not be
treated as meeting the requirements of this section unless such
plan meets investment option requirements similar to the
requirements of section 401(a)(39).''.
(d) Effective Date.--The amendments made by this section shall
apply to plan years beginning after the date of the enactment of this
Act.
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