Sponsors (2)
Need help making sense of this bill?
This is not an official government website.
Copyright © 2026 PLEJ LC. All rights reserved.
Adds a new paragraph (3) to subsection (a) prohibiting fiduciaries from allowing plans to engage in specified transactions with 'covered entities' (defined as foreign adversary entities or sanctioned entities in section 103(h)), including acquiring an interest, lending money or extending credit, furnishing goods/services/facilities, or transferring plan assets or participant/beneficiary data; defines 'fiduciary' for purposes of the participant-data transfer prohibition; and provides exceptions for existing investments and pre-enactment binding agreements subject to compliance with section 103(b)(3) requirements.
Amends section 103(b)(3) of ERISA (29 U.S.C. 1023(b)(3)) by adding new subparagraphs requiring additional disclosures in annual reports about plan assets that are interests in sanctioned entities and foreign adversary entities, and requiring disclosure of ongoing agreements subject to section 404(a)(3)(D); also adds a new subsection (h) containing multiple definitions (e.g., control, Export Administration Regulations, foreign adversary, foreign adversary entity, interest, and sanctioned entity with enumerated lists).
Stops ERISA-covered retirement plans from buying, holding, lending to, providing goods/services to, or transferring plan assets or participant data to entities the law defines as “foreign adversary” or “sanctioned.” Plans that already have such investments or are bound by preexisting contracts may complete them only if fiduciaries follow new conditions and document their decisions. Requires plan administrators to disclose holdings and arrangements tied to sanctioned or foreign-adversary entities, adds statutory definitions for key terms (like “sanctioned entity,” “foreign adversary entity,” and “interest”), and directs the Secretary to issue implementing regulations and deadlines for reporting and compliance.
A fiduciary of a plan must ensure the plan does not engage in a transaction that the fiduciary knows, or should know, will result in the plan acquiring an interest (as defined in section 103(h)) with a covered entity.
A fiduciary must ensure the plan does not lend money or extend credit to a covered entity.
A fiduciary must ensure the plan does not furnish goods, services, or facilities to a covered entity.
A fiduciary must ensure the plan does not transfer, directly or indirectly, to or for use by or for the benefit of a covered entity any plan assets or any data about any participant or beneficiary of the plan.
Defines 'covered entity' to mean a foreign adversary entity or sanctioned entity, as those terms are defined in section 103(h).
Who is affected and how:
Retirement plan participants and beneficiaries: May see portfolio changes if plans divest holdings tied to covered entities; potential short-term investment disruption or reallocation that could affect returns. Plans must also disclose relevant holdings, increasing transparency.
Plan fiduciaries and administrators (including plan sponsors/employers): Face new legal duties to identify and prevent prohibited transactions, document decisions to continue or complete preexisting contracts, and submit new disclosures. They will likely incur compliance costs for legal review, due diligence, monitoring, and reporting.
Investment managers, asset managers, and financial service providers: Funds, managers, and custodians with exposure to entities that could be classified as foreign adversaries or sanctioned must adjust offerings, execute divestments, or stop providing certain services to ERISA plans. They will need to update compliance systems and client reporting.
Employers that sponsor ERISA plans: May need to assist or oversee plan changes, update plan governance documents, and coordinate with service providers to meet reporting and fiduciary duties.
Firms and funds with ties to the designated foreign entities: Could face forced divestment by ERISA plans and loss of business relationships, which could affect valuations and liquidity for specific assets.
Government / national-security policy: Strengthens a financial barrier tying retirement-plan capital to entities the federal government considers national-security risks; intended to reduce U.S. pension exposure to adversary or sanctioned actors.
Practical effects and risks:
Uncertainties:
Expand sections to see detailed analysis
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced March 11, 2025 by James E. Banks · Last progress March 11, 2025
PARSA
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced in Senate