Vote Smart's Synopsis:

Vote to pass a bill that establishes requirements for fiduciaries of employer-sponsored retirement plans and limits when fiduciaries may consider environmental, social, and governance (ESG) factors in employer-sponsored retirement plans governed by the Employee Retirement Income Security Act (ERISA).

Highlights:

• Requires a fiduciary of an employer-sponsored retirement plan to make investment decisions based solely on pecuniary factors (i.e., factors that a fiduciary prudently determines are expected to have a material effect on the risk or return of an investment based on appropriate investment horizons consistent with the plan's policies and objectives) (Sec. 1).

• Authorizes nonpecuniary factors to be considered in certain situations, such as when selecting investment options for certain participant-directed retirement plans or if the fiduciary is unable to distinguish between investment alternatives on the basis of pecuniary factors alone (Sec. 1).

• Prohibits a plan fiduciary from discriminating when selecting, monitoring, and retaining any fiduciary, counsel, employee, or service provider of the plan (Sec. 2).

• Requires a plan fiduciary to act solely and prudently in accordance with the interests of the plan's participants and beneficiaries when exercising a shareholder right (e.g., voting of proxies) (Sec. 3).

• Specifies that the fiduciary duty to manage shareholder rights does not require the voting of every proxy or the exercise of every shareholder right (Sec. 3).

• Requires a plan fiduciary to provide specified notices with respect to a pension plan that provides a participant or beneficiary the opportunity to select from designated investment alternatives (Sec. 4).

Full Bill Text

Full Bill Text