Protecting Prudent Investment of Retirement Savings Act

This bill sets stricter rules for how workplace retirement plans pick investments and vote on company issues. It says plan managers must base choices mainly on financial reasons like risk, return, and costs. If two investments are tied on financial grounds, they may use a non-financial reason as a tiebreaker, but they have to write down why and how it still serves workers’ financial interests. Funds that use non-financial goals can be offered, but they can’t be the plan’s default choice if those goals are part of the fund’s main strategy . The bill also bars discrimination when choosing outside firms to serve the plan, adding a rule to choose and monitor them without regard to race, color, religion, sex, or national origin.

It also sets guardrails for how plans handle shareholder votes. Plans don’t have to vote every proxy. When they do consider voting, they must focus on the plan’s economic interests, consider costs, look at the facts, and keep records. They must also watch any investment manager or proxy advisor they use. Plans may adopt “safe harbor” policies to skip certain votes, such as when proposals aren’t central to the company’s business or when the plan’s stake is very small, while still being allowed to vote when an issue could materially affect returns. These proxy rules start January 1, 2026 . For workers who use a “brokerage window” to buy investments outside the plan’s regular menu, the plan must show a clear notice every time before you trade, warning that these options weren’t vetted by the plan and may carry higher fees and risks, plus a simple chart showing how different returns could affect your balance by age 67. These brokerage-window notices start January 1, 2027 .

Key points

• Who is affected: Workers in 401(k)-style plans, employers, plan managers, investment managers, and proxy advisory firms .
• What changes: Investment picks must rely on financial factors; non-financial goals only as a documented tiebreaker; no defaulting workers into funds whose strategies use non-financial factors; nondiscrimination in hiring service providers; clearer rules for proxy voting; stronger warnings before trading in brokerage windows .
• When: Most investment-decision rules take effect 12 months after enactment; proxy voting rules on January 1, 2026; brokerage-window notices on January 1, 2027 .