Securing Employee Retirement Returns Act

To amend the Employee Retirement Income Security Act of 1974 to clarify the fiduciary duty of plan administrators to select and maintain investments based solely on pecuniary factors, and for other purposes. 1. Short title This Act may be cited as the Securing Employee Retirement Returns Act 2. Fiduciary duty regarding the consideration of certain factors in investment decisions for employee benefit plans (a) In general Subsection (a) of section 404 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104 (3) (A) The duties under paragraph (1) shall include the duty to select and maintain investments (including designated investment alternatives for purposes of a defined contribution plan) based, except as provided in subparagraph (B) or (C), solely on pecuniary factors. (B) Notwithstanding subparagraph (A), when choosing between or among investment alternatives that a fiduciary is unable to distinguish on the basis of pecuniary factors alone, the fiduciary may use non-pecuniary factors as the deciding factor in the selection or maintenance of an investment if the fiduciary documents the following: (i) Why pecuniary factors were not sufficient to select or maintain the investment. (ii) How the chosen non-pecuniary factor is consistent with the interests of participants and beneficiaries in their retirement income or financial benefits under the plan. (C) Notwithstanding subparagraph (A), when selecting or maintaining designated investment alternatives for purposes of a defined contribution plan that permits a participant or beneficiary to choose from a broad range of designated investment alternatives, a fiduciary may select or maintain an investment in an investment fund, product, or model portfolio that considers, or indicates the use of, non-pecuniary factors, if— (i) in selecting or maintaining such investment, the fiduciary otherwise satisfies the duties under paragraph (1) (including, as applicable, subparagraph (B) of this paragraph); and (ii) the investment is not added or retained as, or as a component of, a qualified default investment alternative of the defined contribution plan. (D) For purposes of this paragraph: (i) The term broad range (ii) The term pecuniary factor (iii) The term qualified default investment alternative . (b) Effective date The amendment made by this section shall apply to investments made after the date of enactment of this Act.

Summary: Securing Employee Retirement Returns Act This bill revises the fiduciary duties for a retirement or employee benefit plan that is regulated under the Employee Retirement Income Security Act of 1974. The bill generally requires a fiduciary to select and maintain investments for a plan based solely on pecuniary factors. Under the bill, a pecuniary factor is a factor that is expected to have a material effect on the risk or return of an investment based on appropriate investment horizons that are consistent with the plan's investment objectives and funding policy. The bill allows a fiduciary to use nonpecuniary factors in certain circumstances, such as when a fiduciary (1) is unable to distinguish between investment alternatives on the basis of pecuniary factors alone, or (2) is selecting or maintaining investment alternatives for a defined contribution plan that permits a participant or beneficiary to choose from a broad range of investment alternatives.