Sponsors (2)
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Requires retirement plans that let participants use a brokerage window (invest outside the plan’s designated options) to give participants a specific four-part notice and obtain the participant’s acknowledgement before the participant may direct funds into a non‑designated investment arrangement. The notice must include a chart showing projected account balances at age 67 for 4%, 6%, and 8% returns. The change amends ERISA definitions and the fiduciary/disclosure rule language and takes effect on January 1, 2026.
Before a participant or beneficiary directs an investment into, out of, or within any investment arrangement that is not a designated investment alternative, the participant must be notified of, and must acknowledge, each element of the notice described under paragraph (B) of the added ERISA paragraph (7).
The notice required by the added paragraph (7) must be a four-part information package that is substantially similar to the specified content described under paragraph (B).
The notice must include a graph showing projected retirement balances for the participant or beneficiary at age 67 assuming annual returns of 4 percent, 6 percent, and 8 percent.
Adds a definition of the term "designated investment alternative" to 29 U.S.C. 1002: an investment alternative designated by a responsible fiduciary of an individual account plan described in subsection 404(c) into which participants and beneficiaries may direct investments held in, or contributed to, their individual accounts.
States an exception to the definition: the term "designated investment alternative" does not include brokerage windows, self-directed brokerage accounts, or similar plan arrangements that let participants select investments beyond those designated by a responsible plan fiduciary.
Last progress October 30, 2025 (2 months ago)
Introduced on October 30, 2025 by James E. Banks
Protecting Prudent Investment of Retirement Savings Act
Updated 1 day ago
Last progress January 15, 2026 (3 days ago)
Who is affected and how:
Plan participants (retirement savers): Directly affected — participants who wish to move money into a brokerage window or other non‑designated investment will receive a standardized notice and must provide an acknowledgement before the transfer can proceed. The required projection graph and written information are intended to improve understanding of long‑term outcomes but may delay immediate directions.
Plan sponsors and administrators: Will need to update plan documents, operating procedures, and vendor agreements to ensure the notice is delivered and acknowledgements are captured and retained. They remain fiduciaries responsible for complying with amended ERISA provisions.
Recordkeepers and brokerage‑window providers: Must change participant interfaces, electronic workflows, and transaction gating to require and record participant acknowledgements before allowing directions into non‑designated investments; they will incur implementation and operational costs.
Fiduciary/compliance teams and advisors: Will need to incorporate the new notice language into compliance monitoring, training, and operational checklists; advisors who assist in participant communications will need to update educational materials.
Potential effects on participant behavior and administrative workload: The disclosure may reduce uninformed or impulsive moves into complex investments by making projected long‑term outcomes explicit; however, it also creates additional administrative steps and potential delays for participants seeking immediate access to brokerage windows. Costs for producing compliant notices, building acknowledgement flows, and storing records are borne by plan sponsors and service providers.
Enforcement and legal implications: Because the change amends ERISA fiduciary and disclosure law, failure to follow the notice/acknowledgement process could raise fiduciary breach or prohibited transaction/risk issues for plan fiduciaries and service providers. The effective date gives plans time to prepare before January 1, 2026.