Restoring Integrity in Fiduciary Duty Act
SB 3086, the “Restoring Integrity in Fiduciary Duty Act,” would amend ERISA to narrow how retirement-plan fiduciaries may consider factors when selecting investments and exercising shareholder rights. The bill states that fiduciaries generally may evaluate investments only on “pecuniary factors,” meaning factors expected to have a material effect on risk or return, and may not subordinate participants’ retirement interests or sacrifice return to promote nonpecuniary goals. It also creates a limited exception allowing nonpecuniary considerations only when pecuniary factors cannot distinguish among alternatives, subject to documentation requirements and a defined “capita aut navia” standard for essentially random selection among otherwise equivalent options.
The bill also adds a new ERISA subsection governing shareholder rights, including proxy voting. It would require fiduciaries to act solely in the economic interest of participants and beneficiaries, consider costs, evaluate material facts, keep records of proxy activity, and prudently monitor any investment managers or proxy advisory firms used for voting or advice. It authorizes proxy voting policies, including a safe-harbor policy that permits not voting on certain proposals or low-exposure holdings, while preserving the ability to vote when a matter is expected to have a material economic effect. The bill’s amendments would generally take effect one year after enactment for investment-selection rules and on January 1, 2026, for shareholder-rights rules.
If enacted, the bill would amend ERISA Section 404 to more explicitly constrain fiduciary decision-making for pension and retirement plans, especially with respect to environmental, social, political, ideological, or other nonfinancial considerations. It would affect plan fiduciaries, investment managers, proxy advisory firms, and plan administrators by imposing documentation, monitoring, and recordkeeping requirements and by setting a more detailed federal standard for proxy voting and the exercise of shareholder rights. The bill would likely reduce the ability of ERISA-covered plans to use investments or voting strategies intended to advance nonpecuniary objectives unless those objectives are incidental to otherwise equivalent choices.
Based on the bill text and available context, the measure appears to be framed positively by its sponsors as a clarification of fiduciary duty and a protection of retirement savers’ financial interests. There is no recorded committee transcript or vote history in the provided materials, so there is no direct evidence of broader support or opposition in committee. The structure and findings of the bill suggest a deregulatory or anti-ESG policy orientation, which typically draws support from lawmakers and stakeholders favoring financial-only fiduciary standards.
The main point of contention is whether fiduciaries should be permitted to consider nonpecuniary factors, such as environmental, social, or political considerations, when making investment and proxy-voting decisions. Supporters are likely to argue that the bill prevents retirement assets from being used to advance outside policy goals and keeps decisions focused on risk and return. Opponents would likely argue that the bill is overly restrictive, may interfere with prudent long-term investing, and could limit fiduciaries’ ability to consider governance or other factors that some investors view as financially relevant. The bill’s detailed proxy-voting rules, safe harbor for not voting, and restrictions on default investment options also suggest potential concern from plan fiduciaries and proxy advisers about administrative burden and reduced flexibility.