Protecting Americans’ Investments from Woke Policies Act
What changed between versions
The bill's short title was changed from 'Roll back ESG To Increase Retirement Earnings Act or the RETIRE Act' to 'Protecting Americans' Investments from Woke Policies Act,' broadening the framing beyond just ESG to all non-pecuniary investment considerations.
The bill was restructured from a single section into four divisions (A through D), expanding its scope from solely limiting ESG factors in fiduciary investment decisions to also covering service provider selection, proxy voting, and participant disclosures for brokerage windows.
Division B (No Discrimination in My Benefits) adds a new requirement that plan fiduciaries must select, monitor, and retain any fiduciary, counsel, employee, or service provider without regard to race, color, religion, sex, or national origin.
Division C (Retirement Proxy Protection) establishes that fiduciaries exercising shareholder rights including proxy voting must act solely in the economic interest of the plan and may not promote non-pecuniary goals. It creates a safe harbor allowing fiduciaries to refrain from voting when the plan's assets in an issuer are below 5 percent of total plan assets, requires monitoring of investment managers and proxy advisory firms, and mandates recordkeeping of all proxy votes. Effective January 1, 2024.
Division D (Providing Complete Information to Retirement Investors) requires that before a participant directs an investment into a brokerage window or other non-designated investment arrangement, the plan must provide and obtain acknowledgment of a four-part notice explaining that such investments are not fiduciary-selected, may carry higher fees and risk, and includes a hypothetical graph showing projected balances at age 67 under 4, 6, and 8 percent annual returns. Effective January 1, 2025.
A new definition of 'designated investment alternative' was added to ERISA Section 3, explicitly excluding brokerage windows, self-directed brokerage accounts, and similar arrangements that let participants select investments beyond those chosen by a plan fiduciary.
In the original ESG limitation provision (now Section 1002), the phrase 'a fiduciary of a plan shall be considered' was changed to 'a fiduciary shall be considered,' removing the redundant 'of a plan' language.
