I 
119TH CONGRESS 
1ST SESSION H. R. 1996 
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 
MARCH 10, 2025 
Mrs. HOUCHIN (for herself, Mr. OWENS, and Mr. GROTHMAN) introduced the 
following bill; which was referred to the Committee on Education and 
Workforce 
A BILL 
To amend the Employee Retirement Income Security Act 
of 1974 to clarify the application of prudence and exclu-
sive purpose duties to the exercise of shareholder rights. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Retirement Proxy Pro-
tection Act’’. 
SEC. 2. EXERCISE OF SHAREHOLDER RIGHTS. 
(a) IN GENERAL.—Section 404 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1104) 
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is amended by adding at the end the following new sub-
section: 
‘‘(f) EXERCISE OF SHAREHOLDER RIGHTS.— 
‘‘(1) AUTHORITY TO EXERCISE SHAREHOLDER 
RIGHTS.— 
‘‘(A) IN GENERAL.—The fiduciary duty to 
manage plan assets that are shares of stock in-
cludes the management of shareholder rights 
appurtenant to those shares, including the right 
to vote proxies. When deciding whether to exer-
cise a shareholder right and in exercising such 
right, including the voting of proxies, a fidu-
ciary must act prudently and solely in the inter-
ests of participants and beneficiaries and for 
the exclusive purpose of providing benefits to 
participants and beneficiaries and defraying the 
reasonable expenses of administering the plan. 
The fiduciary duty to manage shareholder 
rights appurtenant to shares of stock does not 
require the voting of every proxy or the exercise 
of every shareholder right. 
‘‘(B) EXCEPTION.—This subsection shall 
not apply to voting, tender, and similar rights 
with respect to securities that are passed 
through pursuant to the terms of an individual 
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account plan to participants and beneficiaries 
with accounts holding such securities. 
‘‘(2) REQUIREMENTS FOR EXERCISE OF SHARE-
HOLDER
RIGHTS.—A 
fiduciary, 
when 
deciding 
whether to exercise a shareholder right and when ex-
ercising a shareholder right— 
‘‘(A) shall— 
‘‘(i) act solely in accordance with the 
economic interest of the plan and its par-
ticipants and beneficiaries; 
‘‘(ii) consider any costs involved; 
‘‘(iii) evaluate material facts that 
form the basis for any particular proxy 
vote or exercise of shareholder rights; and 
‘‘(iv) maintain a record of any proxy 
vote, proxy voting activity, or other exer-
cise of a shareholder right, including any 
attempt to influence management; and 
‘‘(B) shall not subordinate the interests of 
participants and beneficiaries in their retire-
ment income or financial benefits under the 
plan to any non-pecuniary objective, or promote 
non-pecuniary benefits or goals unrelated to 
those financial interests of the plan’s partici-
pants and beneficiaries. 
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‘‘(3) MONITORING.—A fiduciary shall exercise 
prudence and diligence in the selection and moni-
toring of a person, if any, selected to advise or oth-
erwise assist with the exercise of shareholder rights, 
including by providing research and analysis, rec-
ommendations on exercise of proxy voting or other 
shareholder rights, administrative services with re-
spect to voting proxies, and recordkeeping and re-
porting services. 
‘‘(4) INVESTMENT MANAGERS AND PROXY ADVI-
SORY FIRMS.—Where the authority to vote proxies 
or exercise other shareholder rights has been dele-
gated to an investment manager pursuant to section 
403(a), or a proxy voting advisory firm or other per-
son who performs advisory services as to the voting 
of proxies or the exercise of other shareholder rights, 
a responsible plan fiduciary shall prudently monitor 
the proxy voting activities of such investment man-
ager or advisory firm and determine whether such 
activities are in compliance with paragraphs (1) and 
(2). 
‘‘(5) VOTING POLICIES.— 
‘‘(A) IN GENERAL.—In deciding whether to 
vote a proxy pursuant to this subsection, the 
plan fiduciary may adopt a proxy voting policy, 
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including a safe harbor proxy voting policy de-
scribed in subparagraph (B), providing that the 
authority to vote a proxy shall be exercised pur-
suant to specific parameters designed to serve 
the economic interest of the plan. 
‘‘(B) SAFE
HARBOR
VOTING
POLICY.— 
With respect to a decision not to vote a proxy, 
a fiduciary shall satisfy the fiduciary respon-
sibilities under this subsection if such fiduciary 
adopts and is following a safe harbor proxy vot-
ing policy that— 
‘‘(i) limits voting resources to par-
ticular types of proposals that the fiduciary 
has prudently determined are substantially 
related to the business activities of the 
issuer or are expected to have a material 
effect on the value of the plan investment; 
or 
‘‘(ii) establishes that the fiduciary will 
refrain from voting on proposals or par-
ticular types of proposals when the assets 
of a plan invested in the issuer relative to 
the total assets of such plan are below 5 
percent (or, in the event such assets are 
under management, when the assets under 
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management invested in the issuer are 
below 5 percent of the total assets under 
management). 
‘‘(C) EXCEPTION.—No proxy voting policy 
adopted pursuant to this paragraph shall pre-
clude a fiduciary from submitting a proxy vote 
when the fiduciary determines that the matter 
being voted on is expected to have a material 
economic effect on the investment performance 
of a plan’s portfolio (or the investment perform-
ance of assets under management in the case of 
an investment manager); provided, however, 
that in all cases compliance with a safe harbor 
voting policy shall be presumed to satisfy fidu-
ciary responsibilities with respect to decisions 
not to vote. 
‘‘(6) REVIEW.—A fiduciary shall periodically re-
view any policy adopted under this subsection.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to an exercise of shareholder 
rights occurring on or after January 1, 2026. 
Æ 
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