IB 

Union Calendar No. 186 

118TH CONGRESS 

1ST SESSION H. R. 5337 

[Report No. 118–227] 

To amend the Employee Retirement Income Security Act of 1974 to clarify 

the application of prudence and exclusive purpose duties to the exercise 

of shareholder rights. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 5, 2023 

Mrs. HOUCHIN introduced the following bill; which was referred to the 

Committee on Education and the Workforce 

SEPTEMBER 26, 2023 

Additional sponsors: Mr. HUIZENGA, Mr. SESSIONS, Mr. GROTHMAN, Mr. 

WILSON of South Carolina, Mr. ESTES, Mr. BARR, Mr. FLOOD, and Mr. 

OWENS

SEPTEMBER 26, 2023 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on September 5, 2023] 


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A BILL 

To amend the Employee Retirement Income Security Act 

of 1974 to clarify the application of prudence and exclusive purpose duties to the exercise of shareholder rights. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Retirement Proxy Pro5 tection Act’’. 

6 SEC. 2. EXERCISE OF SHAREHOLDER RIGHTS. 

7 (a) IN GENERAL.—Section 404 of the Employee Re8 tirement Income Security Act of 1974 (29 U.S.C. 1104) is 

9 amended by adding at the end the following new subsection: 

10 ‘‘(f) EXERCISE OF SHAREHOLDER RIGHTS.— 

11 ‘‘(1) AUTHORITY TO EXERCISE SHAREHOLDER

12 RIGHTS.— 

13 ‘‘(A) IN GENERAL.—The fiduciary duty to 

14 manage plan assets that are shares of stock in15 cludes the management of shareholder rights ap16 purtenant to those shares, including the right to 

17 vote proxies. When deciding whether to exercise 

18 a shareholder right and in exercising such right, 

19 including the voting of proxies, a fiduciary must 

20 act prudently and solely in the interests of par21 ticipants and beneficiaries and for the exclusive 

22 purpose of providing benefits to participants and 

23 beneficiaries and defraying the reasonable ex24 penses of administering the plan. The fiduciary 

25 duty to manage shareholder rights appurtenant 


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1 to shares of stock does not require the voting of 

2 every proxy or the exercise of every shareholder 

3 right. 

4 ‘‘(B) EXCEPTION.—This subsection shall not 

5 apply to voting, tender, and similar rights with 

6 respect to securities that are passed through pur7 suant to the terms of an individual account plan 

8 to participants and beneficiaries with accounts 

9 holding such securities. 

10 ‘‘(2) REQUIREMENTS FOR EXERCISE OF SHARE11 HOLDER RIGHTS.—A fiduciary, when deciding wheth12 er to exercise a shareholder right and when exercising 

13 a shareholder right— 

14 ‘‘(A) shall— 

15 ‘‘(i) act solely in accordance with the 

16 economic interest of the plan and its par17 ticipants and beneficiaries; 

18 ‘‘(ii) consider any costs involved; 

19 ‘‘(iii) evaluate material facts that form 

20 the basis for any particular proxy vote or 

21 exercise of shareholder rights; and 

22 ‘‘(iv) maintain a record of any proxy 

23 vote, proxy voting activity, or other exercise 

24 of a shareholder right, including any at25 tempt to influence management; and 


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1 ‘‘(B) shall not subordinate the interests of 

2 participants and beneficiaries in their retire3 ment income or financial benefits under the plan 

4 to any non-pecuniary objective, or promote non5 pecuniary benefits or goals unrelated to those fi6 nancial interests of the plan’s participants and 

7 beneficiaries. 

8 ‘‘(3) MONITORING.—A fiduciary shall exercise 

9 prudence and diligence in the selection and moni10 toring of a person, if any, selected to advise or other11 wise assist with the exercise of shareholder rights, in12 cluding by providing research and analysis, rec13 ommendations on exercise of proxy voting or other 

14 shareholder rights, administrative services with re15 spect to voting proxies, and recordkeeping and report16 ing services. 

17 ‘‘(4) INVESTMENT MANAGERS AND PROXY ADVI18 SORY FIRMS.—Where the authority to vote proxies or 

19 exercise other shareholder rights has been delegated to 

20 an investment manager pursuant to section 403(a), or 

21 a proxy voting advisory firm or other person who 

22 performs advisory services as to the voting of proxies 

23 or the exercise of other shareholder rights, a respon24 sible plan fiduciary shall prudently monitor the 

25 proxy voting activities of such investment manager or 


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1 advisory firm and determine whether such activities 

2 are in compliance with paragraphs (1) and (2). 

3 ‘‘(5) VOTING POLICIES.— 

4 ‘‘(A) IN GENERAL.—In deciding whether to 

5 vote a proxy pursuant to this subsection, the 

6 plan fiduciary may adopt a proxy voting policy, 

7 including a safe harbor proxy voting policy de8 scribed in subparagraph (B), providing that the 

9 authority to vote a proxy shall be exercised pur10 suant to specific parameters designed to serve the 

11 economic interest of the plan. 

12 ‘‘(B) SAFE HARBOR VOTING POLICY.—With 

13 respect to a decision not to vote a proxy, a fidu14 ciary shall satisfy the fiduciary responsibilities 

15 under this subsection if such fiduciary adopts 

16 and is following a safe harbor proxy voting pol17 icy that— 

18 ‘‘(i) limits voting resources to par19 ticular types of proposals that the fiduciary 

20 has prudently determined are substantially 

21 related to the business activities of the 

22 issuer or are expected to have a material ef23 fect on the value of the plan investment; or 

24 ‘‘(ii) establishes that the fiduciary will 

25 refrain from voting on proposals or parVerDate Sep 11 2014 02:42 Sep 27, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H5337.RH H5337

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1 ticular types of proposals when the assets of 

2 a plan invested in the issuer relative to the 

3 total assets of such plan are below 5 percent 

4 (or, in the event such assets are under man5 agement, when the assets under manage6 ment invested in the issuer are below 5 per7 cent of the total assets under management). 

8 ‘‘(C) EXCEPTION.—No proxy voting policy 

9 adopted pursuant to this paragraph shall pre10 clude a fiduciary from submitting a proxy vote 

11 when the fiduciary determines that the matter 

12 being voted on is expected to have a material eco13 nomic effect on the investment performance of a 

14 plan’s portfolio (or the investment performance 

15 of assets under management in the case of an in16 vestment manager); provided, however, that in 

17 all cases compliance with a safe harbor voting 

18 policy shall be presumed to satisfy fiduciary re19 sponsibilities with respect to decisions not to 

20 vote. 

21 ‘‘(6) REVIEW.—A fiduciary shall periodically re22 view any policy adopted under this subsection.’’. 

23 (b) EFFECTIVE DATE.—The amendments made by sub24 section (a) shall apply to an exercise of shareholder rights 

25 occurring on or after January 1, 2024. 


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Union Calendar No. 186 

118TH CONGRESS 

1ST SESSION H. R. 5337 

[Report No. 118–227] 

A BILL 

To amend the Employee Retirement Income Secucise of shareholder rights. dence and exclusive purpose duties to the exer- rity Act of 1974 to clarify the application of pruSEPTEMBER 26, 2023 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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