Us Congress 2025-2026 Regular Session

Us Congress House Bill HB1996 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 1996
5	5	To amend the Employee Retirement Income Security Act of 1974 to clarify
6	6	the application of prudence and exclusive purpose duties to the exercise
7	7	of shareholder rights.
8	8	IN THE HOUSE OF REPRESENTATIVES
9	9	MARCH10, 2025
10	10	Mrs. H
11	11	OUCHIN(for herself, Mr. OWENS, and Mr. GROTHMAN) introduced the
12	12	following bill; which was referred to the Committee on Education and
13	13	Workforce
14	14	A BILL
15	15	To amend the Employee Retirement Income Security Act
16	16	of 1974 to clarify the application of prudence and exclu-
17	17	sive purpose duties to the exercise of shareholder rights.
18	18	Be it enacted by the Senate and House of Representa-1
19	19	tives of the United States of America in Congress assembled, 2
20	20	SECTION 1. SHORT TITLE. 3
21	21	This Act may be cited as the ‘‘Retirement Proxy Pro-4
22	22	tection Act’’. 5
23	23	SEC. 2. EXERCISE OF SHAREHOLDER RIGHTS. 6
24	24	(a) I
25	25	NGENERAL.—Section 404 of the Employee Re-7
26	26	tirement Income Security Act of 1974 (29 U.S.C. 1104) 8
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29	29	•HR 1996 IH
30	30	is amended by adding at the end the following new sub-1
31	31	section: 2
32	32	‘‘(f) E
33	33	XERCISE OFSHAREHOLDERRIGHTS.— 3
34	34	‘‘(1) A
35	35	UTHORITY TO EXERCISE SHAREHOLDER 4
36	36	RIGHTS.— 5
37	37	‘‘(A) I
38	38	N GENERAL.—The fiduciary duty to 6
39	39	manage plan assets that are shares of stock in-7
40	40	cludes the management of shareholder rights 8
41	41	appurtenant to those shares, including the right 9
42	42	to vote proxies. When deciding whether to exer-10
43	43	cise a shareholder right and in exercising such 11
44	44	right, including the voting of proxies, a fidu-12
45	45	ciary must act prudently and solely in the inter-13
46	46	ests of participants and beneficiaries and for 14
47	47	the exclusive purpose of providing benefits to 15
48	48	participants and beneficiaries and defraying the 16
49	49	reasonable expenses of administering the plan. 17
50	50	The fiduciary duty to manage shareholder 18
51	51	rights appurtenant to shares of stock does not 19
52	52	require the voting of every proxy or the exercise 20
53	53	of every shareholder right. 21
54	54	‘‘(B) E
55	55	XCEPTION.—This subsection shall 22
56	56	not apply to voting, tender, and similar rights 23
57	57	with respect to securities that are passed 24
58	58	through pursuant to the terms of an individual 25
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61	61	•HR 1996 IH
62	62	account plan to participants and beneficiaries 1
63	63	with accounts holding such securities. 2
64	64	‘‘(2) R
65	65	EQUIREMENTS FOR EXERCISE OF SHARE -3
66	66	HOLDER RIGHTS .—A fiduciary, when deciding 4
67	67	whether to exercise a shareholder right and when ex-5
68	68	ercising a shareholder right— 6
69	69	‘‘(A) shall— 7
70	70	‘‘(i) act solely in accordance with the 8
71	71	economic interest of the plan and its par-9
72	72	ticipants and beneficiaries; 10
73	73	‘‘(ii) consider any costs involved; 11
74	74	‘‘(iii) evaluate material facts that 12
75	75	form the basis for any particular proxy 13
76	76	vote or exercise of shareholder rights; and 14
77	77	‘‘(iv) maintain a record of any proxy 15
78	78	vote, proxy voting activity, or other exer-16
79	79	cise of a shareholder right, including any 17
80	80	attempt to influence management; and 18
81	81	‘‘(B) shall not subordinate the interests of 19
82	82	participants and beneficiaries in their retire-20
83	83	ment income or financial benefits under the 21
84	84	plan to any non-pecuniary objective, or promote 22
85	85	non-pecuniary benefits or goals unrelated to 23
86	86	those financial interests of the plan’s partici-24
87	87	pants and beneficiaries. 25
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90	90	•HR 1996 IH
91	91	‘‘(3) MONITORING.—A fiduciary shall exercise 1
92	92	prudence and diligence in the selection and moni-2
93	93	toring of a person, if any, selected to advise or oth-3
94	94	erwise assist with the exercise of shareholder rights, 4
95	95	including by providing research and analysis, rec-5
96	96	ommendations on exercise of proxy voting or other 6
97	97	shareholder rights, administrative services with re-7
98	98	spect to voting proxies, and recordkeeping and re-8
99	99	porting services. 9
100	100	‘‘(4) I
101	101	NVESTMENT MANAGERS AND PROXY ADVI -10
102	102	SORY FIRMS.—Where the authority to vote proxies 11
103	103	or exercise other shareholder rights has been dele-12
104	104	gated to an investment manager pursuant to section 13
105	105	403(a), or a proxy voting advisory firm or other per-14
106	106	son who performs advisory services as to the voting 15
107	107	of proxies or the exercise of other shareholder rights, 16
108	108	a responsible plan fiduciary shall prudently monitor 17
109	109	the proxy voting activities of such investment man-18
110	110	ager or advisory firm and determine whether such 19
111	111	activities are in compliance with paragraphs (1) and 20
112	112	(2). 21
113	113	‘‘(5) V
114	114	OTING POLICIES.— 22
115	115	‘‘(A) I
116	116	N GENERAL.—In deciding whether to 23
117	117	vote a proxy pursuant to this subsection, the 24
118	118	plan fiduciary may adopt a proxy voting policy, 25
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121	121	•HR 1996 IH
122	122	including a safe harbor proxy voting policy de-1
123	123	scribed in subparagraph (B), providing that the 2
124	124	authority to vote a proxy shall be exercised pur-3
125	125	suant to specific parameters designed to serve 4
126	126	the economic interest of the plan. 5
127	127	‘‘(B) S
128	128	AFE HARBOR VOTING POLICY .— 6
129	129	With respect to a decision not to vote a proxy, 7
130	130	a fiduciary shall satisfy the fiduciary respon-8
131	131	sibilities under this subsection if such fiduciary 9
132	132	adopts and is following a safe harbor proxy vot-10
133	133	ing policy that— 11
134	134	‘‘(i) limits voting resources to par-12
135	135	ticular types of proposals that the fiduciary 13
136	136	has prudently determined are substantially 14
137	137	related to the business activities of the 15
138	138	issuer or are expected to have a material 16
139	139	effect on the value of the plan investment; 17
140	140	or 18
141	141	‘‘(ii) establishes that the fiduciary will 19
142	142	refrain from voting on proposals or par-20
143	143	ticular types of proposals when the assets 21
144	144	of a plan invested in the issuer relative to 22
145	145	the total assets of such plan are below 5 23
146	146	percent (or, in the event such assets are 24
147	147	under management, when the assets under 25
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150	150	•HR 1996 IH
151	151	management invested in the issuer are 1
152	152	below 5 percent of the total assets under 2
153	153	management). 3
154	154	‘‘(C) E
155	155	XCEPTION.—No proxy voting policy 4
156	156	adopted pursuant to this paragraph shall pre-5
157	157	clude a fiduciary from submitting a proxy vote 6
158	158	when the fiduciary determines that the matter 7
159	159	being voted on is expected to have a material 8
160	160	economic effect on the investment performance 9
161	161	of a plan’s portfolio (or the investment perform-10
162	162	ance of assets under management in the case of 11
163	163	an investment manager); provided, however, 12
164	164	that in all cases compliance with a safe harbor 13
165	165	voting policy shall be presumed to satisfy fidu-14
166	166	ciary responsibilities with respect to decisions 15
167	167	not to vote. 16
168	168	‘‘(6) R
169	169	EVIEW.—A fiduciary shall periodically re-17
170	170	view any policy adopted under this subsection.’’. 18
171	171	(b) E
172	172	FFECTIVEDATE.—The amendments made by 19
173	173	subsection (a) shall apply to an exercise of shareholder 20
174	174	rights occurring on or after January 1, 2026. 21
175	175	Æ
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