[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5339 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 5339
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.
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IN THE HOUSE OF REPRESENTATIVES
September 5, 2023
Mr. Allen introduced the following bill; which was referred to the
Committee on Education and the Workforce
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A BILL
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.
This Act may be cited as the ``Roll back ESG To Increase Retirement
Earnings Act'' or the ``RETIRE Act''.
SEC. 2. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 AMENDMENT.
(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 of a plan 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 only 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.
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