I 

117TH CONGRESS 

2D SESSION H. R. 7151 

To amend the Investment Advisers Act of 1940 and the Employment Retirement Income Security Act of 1974 to specify that only pecuniary factors 

are to be taken into account in determining best interest, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 18, 2022 

Mr. BARR (for himself and Mr. ALLEN) introduced the following bill; which 

was referred to the Committee on Education and Labor, and in addition 

to the Committee on Financial Services, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Investment Advisers Act of 1940 and the 

Employment Retirement Income Security Act of 1974 

to specify that only pecuniary factors are to be taken 

into account in determining best interest, and for other 

purposes. 

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 ‘‘Ensuring Sound Guid5 ance Act’’. 


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1 SEC. 2. INVESTMENT ADVISORS ACT OF 1940 AMENDMENT. 

2 (a) IN GENERAL.—Section 211(g) of the Investment 

3 Advisers Act of 1940 (15 U.S.C. 80b–11(g)) is amended 

4 by adding at the end the following: 

5 ‘‘(3) BEST INTEREST BASED ON PECUNIARY

6 FACTORS.—For purposes of paragraph (1), the best 

7 interest of a customer shall be determined using only 

8 pecuniary factors, unless the customer specifically 

9 requests that non-pecuniary factors be considered.’’. 

10 (b) RULEMAKING.—Not later than the end of the 12- 

11 month period beginning on the date of enactment of this 

12 Act, the Securities and Exchange Commission shall revise 

13 or issue such rules as may be necessary to implement the 

14 amendment made by subsection (a). 

15 SEC. 3. EMPLOYEE RETIREMENT INCOME SECURITY ACT 

16 OF 1974 AMENDMENT. 

17 Section 404(a) of the Employee Retirement Income 

18 Security Act of 1974 (29 U.S.C. 1104(a)) is amended by 

19 adding at the end the following: 

20 ‘‘(3) INTEREST BASED ON PECUNIARY FAC21 TORS.— 

22 ‘‘(A) IN GENERAL.—For purposes of para23 graph (1), a fiduciary of a plan shall be consid24 ered to act solely in the interest of the partici25 pants and beneficiaries of the plan with respect 

26 to a plan investment or investment course of acVerDate Sep 11 2014 04:02 Mar 22, 2022 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7151.IH H7151

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1 tion only if the fiduciary’s action with respect 

2 to such investment is based only on pecuniary 

3 factors. The fiduciary may not subordinate the 

4 interests of the participants and beneficiaries in 

5 their retirement income or financial benefits 

6 under the plan to other objectives and may not 

7 sacrifice investment return or take on addi8 tional investment risk to promote non-pecuniary 

9 benefits or goals. The weight given to any pecu10 niary factor by a fiduciary should appropriately 

11 reflect a prudent assessment of the impact of 

12 such factor on risk-return. 

13 ‘‘(B) INVESTMENT ALTERNATIVES FOR

14 PARTICIPANT-DIRECTED INDIVIDUAL ACCOUNT

15 PLANS.—In selecting investment options for a 

16 pension plan described in subsection (c)(1)(A), 

17 a fiduciary is not prohibited from considering or 

18 including an investment option on the basis 

19 that such investment option promotes non-pecu20 niary benefits or goals, provided that the fidu21 ciary— 

22 ‘‘(i) satisfies the requirements of 

23 paragraph (1) and subparagraph (A) in 

24 considering or including any such invest25 ment option; and 


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1 ‘‘(ii) does not consider or include such 

2 investment option as a default investment 

3 (as defined in the regulations issued by the 

4 Secretary under subsection (c)(5)(A)), or a 

5 component thereof. 

6 ‘‘(C) PECUNIARY FACTOR DEFINED.—For 

7 the purposes of this paragraph, the term ‘pecu8 niary factor’ means a factor that a fiduciary 

9 prudently determines is expected to have a ma10 terial effect on the risk and return of an invest11 ment based on appropriate investment horizons 

12 consistent with the plan’s investment objectives 

13 and the funding policy established pursuant to 

14 section 402(b)(1).’’. 

15 SEC. 4. PROHIBITION OF RULE RELATED TO FIDUCIARY 

16 PRUDENCE AND LOYALTY. 

17 The Secretary of Labor may not finalize, implement, 

18 administer, or enforce the proposed rule entitled ‘‘Pru19 dence and Loyalty in Selecting Plan Investments and Ex20 ercising Shareholder Rights’’ (86 Fed. Reg. 57272) and 

21 dated October 14, 2021. 

Æ 


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