Bill > S3086

This bill amends the Employee Retirement Income Security Act (ERISA) to establish clear guidelines for how fiduciaries (people responsible for managing retirement plan investments) can evaluate and select investments, and how they can exercise shareholder rights. Specifically, the bill requires fiduciaries to prioritize financial performance and participant benefits over non-financial objectives, mandating that investment decisions must be based primarily on "pecuniary factors" - financial considerations that a reasonable investor would consider important for risk and return. When investment alternatives are equal, fiduciaries can use a "capita aut navia" standard (essentially a random selection method) to choose between them, but must thoroughly document their decision-making process. The bill also provides detailed requirements for how fiduciaries can exercise shareholder rights, such as voting proxies, emphasizing that these actions must be done solely in the economic interests of plan participants, with prudence and careful consideration of costs. Investment managers must monitor their proxy voting activities and can adopt safe harbor voting policies that limit voting to proposals substantially related to a company's business or when the plan's investment in a particular company is significant. The bill aims to ensure that retirement plan management focuses on financial performance and participant benefits, rather than pursuing broader social or political goals.

Health and Social Services

https://www.congress.gov/bill/119th-congress/senate-bill/3086/all-info