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On January 15, the U.S. House of Representatives passed the “Protecting Prudent Investment of Retirement Savings Act” (H.R. 2988) which would amend the Employee Retirement Income Security Act of 1974 (ERISA) to require fiduciaries to base investment decisions solely on factors such as risk and return. The bill would also limit the consideration of non-pecuniary factors, including ESG-related criteria, when selecting investments or managing plan assets. The bill would require that proxy voting be explicitly subject to ERISA’s duties of prudence and loyalty. Retirement plans would therefore be required to vote proxies based on the economic interest of plan participants and beneficiaries. Three Democratic House members joined all of the Republicans to pass the measure.

The bill advanced out of the House Committee on Education and Workforce in a party line vote in June 2025. Next steps require consideration by the U.S. Senate where the measure faces various hurdles. The Department of Labor under President Trump is currently examining rulemaking proposals in this area after rolling back the Biden Administration’s 2022 rule “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.”

Click here to review the legislative text of the “Protecting Prudent Investment of Retirement Savings Act.”