Securing Employee Retirement Returns Act
Bill: S.4484 | Sponsor: Sen. Daines, Steve (R-MT)
Policy area: Labor and Employment

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.

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Securing Employee Retirement Returns 
Act''.

SEC. 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) is amended by 
adding at the end the following new paragraph:
    ``(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' has the meaning given such 
        term in section 2550.404c-1(b)(3) of title 29, Code of Federal 
        Regulations (or successor regulations).
            ``(ii) The term `pecuniary factor' means a factor that a 
        fiduciary prudently determines is expected to have a material 
        effect on the risk or return of an investment based on 
        appropriate investment horizons consistent with the plan's 
        investment objectives and the plan's funding policy established 
        pursuant to section 402(b)(1).
            ``(iii) The term `qualified default investment alternative' 
        has the meaning given such term in section 2550.404c-5(e)(4) of 
        title 29, Code of Federal Regulations (or successor 
        regulations).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to investments made after the date of enactment of this Act.
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