II 118TH CONGRESS 1ST SESSION S. 1563 To amend the Employee Retirement Income Security Act of 1974 to clarify the fiduciary duty of plan administrators to select and maintain invest- ments based solely on pecuniary factors, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 11, 2023 Mr. BRAUN (for himself, Mrs. BLACKBURN, Mr. CRUZ, Mr. BUDD, Mr. TUBERVILLE, Mr. WICKER, Mr. MARSHALL, Mr. DAINES, and Mr. CAS- SIDY) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To amend the Employee Retirement Income Security Act of 1974 to clarify the fiduciary duty of plan administra- tors to select and maintain investments based solely on pecuniary factors, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Maximize Americans’ 4 Retirement Security Act’’. 5 VerDate Sep 11 2014 23:08 May 23, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1563.IS S1563 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 1563 IS SEC. 2. FIDUCIARY DUTY REGARDING THE CONSIDERATION 1 OF CERTAIN FACTORS IN INVESTMENT DECI- 2 SIONS FOR EMPLOYEE BENEFIT PLANS. 3 (a) IN GENERAL.—Subsection (a) of section 404 of 4 the Employee Retirement Income Security Act of 1974 5 (29 U.S.C. 1104) is amended by adding at the end the 6 following new paragraph: 7 ‘‘(3)(A) The duties under paragraph (1) shall include 8 the duty to select and maintain investments based, except 9 as provided in subparagraph (B), solely on pecuniary fac- 10 tors. 11 ‘‘(B) Notwithstanding subparagraph (A), when 12 choosing between or among investment alternatives that 13 a fiduciary is unable to distinguish on the basis of pecu- 14 niary factors alone, the fiduciary may use non-pecuniary 15 factors as the deciding factor in the selection or mainte- 16 nance of an investment if the fiduciary furnishes to par- 17 ticipants documentation on the following: 18 ‘‘(i) Why pecuniary factors were not sufficient 19 to select or maintain the investment. 20 ‘‘(ii) How the investment compares to the alter- 21 native investments with regard to— 22 ‘‘(I) the composition of the investments of 23 the plan with regard to diversification; 24 ‘‘(II) the liquidity and current return of 25 the investments of the plan relative to the an- 26 VerDate Sep 11 2014 23:08 May 23, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1563.IS S1563 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 1563 IS ticipated cash flow requirements of the plan; 1 and 2 ‘‘(III) the projected return of the invest- 3 ments of the plan relative to the funding objec- 4 tives of the plan. 5 ‘‘(iii) How the chosen non-pecuniary factor is 6 consistent with the interests of participants and 7 beneficiaries in their retirement income or financial 8 benefits under the plan. 9 ‘‘(C) For purposes of this paragraph, the term ‘pecu- 10 niary factor’ means a factor that a fiduciary prudently de- 11 termines is expected to have a material effect on the risk 12 or return of an investment based on appropriate invest- 13 ment horizons consistent with the plan’s investment objec- 14 tives and the plan’s funding policy established pursuant 15 to section 402(b)(1).’’. 16 (b) EFFECTIVE DATE.—The amendment made by 17 this section shall apply to investments made after the date 18 that is 60 days after the date of enactment of this Act. 19 Æ VerDate Sep 11 2014 23:08 May 23, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\S1563.IS S1563 pbinns on DSKJLVW7X2PROD with $$_JOB