Sponsors (2)
Official title: Amend the Employment Retirement Income Security Act of 1974 to prohibit plan investments in foreign adversary and sanctioned entities, require disclosure of existing investments in such entities, and for other purposes.
Introduced March 11, 2025 by James E. Banks · Last progress March 11, 2025
The bill prioritizes protecting retirement assets and participant data from exposure to foreign-adversary or sanctioned entities and increases transparency and oversight — at the cost of higher compliance and reporting burdens, potential divestments that could lower returns, and added liability and operational challenges for plan sponsors and service providers.
Millions of retirement plan participants (middle-class families, taxpayers) are less likely to have their retirement assets invested in or transferred to foreign-adversary or sanctioned entities, reducing the risk that savings indirectly support hostile actors.
Plan participants' personal and transaction data are better protected because fiduciaries are barred from transferring participant or beneficiary data to foreign-adversary or sanctioned entities.
Participants and beneficiaries gain clearer transparency about whether their retirement plans hold investments tied to sanctioned or foreign-adversary entities, enabling them to assess portfolio risk and fiduciary stewardship.
Plan administrators and financial institutions will face higher compliance and reporting costs to screen vendors, identify indirect and derivative interests, and meet new disclosure requirements, raising plan operating expenses.
Some retirement plans may be forced to divest holdings in entities later designated as covered entities or avoid those investments altogether, potentially reducing returns and harming participants' long-term savings.
Broadening who qualifies as a fiduciary for data transfers could expose more plan administrators, sponsors, and contractors to liability for inadvertent data sharing or compliance failures.
Based on analysis of 3 sections of legislative text.
Prohibits ERISA fiduciaries from transactions or data transfers involving sanctioned or foreign‑adversary entities and requires detailed annual disclosures of any such holdings or commitments.
Prohibits employee benefit plan fiduciaries from doing transactions that would cause plans to acquire interests in, lend to, provide goods/services to, transfer assets to, or transfer participant/beneficiary data to entities designated as foreign adversaries or sanctioned entities. It narrows an expanded fiduciary definition for data handling, creates narrow exceptions for existing investments/contracts that meet specified conditions, and requires new, itemized annual disclosures identifying plan holdings and commitments tied to sanctioned or foreign adversary entities. The Labor Secretary must issue implementing regulations within 180 days and those rules must take effect no later than one year after enactment.