[House Report 118-227]
[From the U.S. Government Publishing Office]


118th Congress }                                          { REPORT 
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                          { 118-227

======================================================================
 
                  RETIREMENT PROXY PROTECTION ACT

                                _______
                                

 September 26, 2023.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Ms. Foxx, from the Committee on Education and the Workforce, submitted 
                             the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5337]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 5337) to amend the Employee Retirement 
Income Security Act of 1974 to clarify the application of 
prudence and exclusive purpose duties to the exercise of 
shareholder rights, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Retirement Proxy Protection Act''.

SEC. 2. EXERCISE OF SHAREHOLDER RIGHTS.

  (a) In General.--Section 404 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104) is amended by adding at the end 
the following new subsection:
  ``(f) Exercise of Shareholder Rights.--
          ``(1) Authority to exercise shareholder rights.--
                  ``(A) In general.--The fiduciary duty to manage plan 
                assets that are shares of stock includes the management 
                of shareholder rights appurtenant to those shares, 
                including the right to vote proxies. When deciding 
                whether to exercise a shareholder right and in 
                exercising such right, including the voting of proxies, 
                a fiduciary must act prudently and solely in the 
                interests of participants and beneficiaries and for the 
                exclusive purpose of providing benefits to participants 
                and beneficiaries and defraying the reasonable expenses 
                of administering the plan. The fiduciary duty to manage 
                shareholder rights appurtenant to shares of stock does 
                not require the voting of every proxy or the exercise 
                of every shareholder right.
                  ``(B) Exception.--This subsection shall not apply to 
                voting, tender, and similar rights with respect to 
                securities that are passed through pursuant to the 
                terms of an individual account plan to participants and 
                beneficiaries with accounts holding such securities.
          ``(2) Requirements for exercise of shareholder rights.--A 
        fiduciary, when deciding whether to exercise a shareholder 
        right and when exercising a shareholder right--
                  ``(A) shall--
                          ``(i) act solely in accordance with the 
                        economic interest of the plan and its 
                        participants and beneficiaries;
                          ``(ii) consider any costs involved;
                          ``(iii) evaluate material facts that form the 
                        basis for any particular proxy vote or exercise 
                        of shareholder rights; and
                          ``(iv) maintain a record of any proxy vote, 
                        proxy voting activity, or other exercise of a 
                        shareholder right, including any attempt to 
                        influence management; and
                  ``(B) shall not subordinate the interests of 
                participants and beneficiaries in their retirement 
                income or financial benefits under the plan to any non-
                pecuniary objective, or promote non-pecuniary benefits 
                or goals unrelated to those financial interests of the 
                plan's participants and beneficiaries.
          ``(3) Monitoring.--A fiduciary shall exercise prudence and 
        diligence in the selection and monitoring of a person, if any, 
        selected to advise or otherwise assist with the exercise of 
        shareholder rights, including by providing research and 
        analysis, recommendations on exercise of proxy voting or other 
        shareholder rights, administrative services with respect to 
        voting proxies, and recordkeeping and reporting services.
          ``(4) Investment managers and proxy advisory firms.--Where 
        the authority to vote proxies or exercise other shareholder 
        rights has been delegated to an investment manager pursuant to 
        section 403(a), or a proxy voting advisory firm or other person 
        who performs advisory services as to the voting of proxies or 
        the exercise of other shareholder rights, a responsible plan 
        fiduciary shall prudently monitor the proxy voting activities 
        of such investment manager or advisory firm and determine 
        whether such activities are in compliance with paragraphs (1) 
        and (2).
          ``(5) Voting policies.--
                  ``(A) In general.--In deciding whether to vote a 
                proxy pursuant to this subsection, the plan fiduciary 
                may adopt a proxy voting policy, including a safe 
                harbor proxy voting policy described in subparagraph 
                (B), providing that the authority to vote a proxy shall 
                be exercised pursuant to specific parameters designed 
                to serve the economic interest of the plan.
                  ``(B) Safe harbor voting policy.--With respect to a 
                decision not to vote a proxy, a fiduciary shall satisfy 
                the fiduciary responsibilities under this subsection if 
                such fiduciary adopts and is following a safe harbor 
                proxy voting policy that--
                          ``(i) limits voting resources to particular 
                        types of proposals that the fiduciary has 
                        prudently determined are substantially related 
                        to the business activities of the issuer or are 
                        expected to have a material effect on the value 
                        of the plan investment; or
                          ``(ii) establishes that the fiduciary will 
                        refrain from voting on proposals or particular 
                        types of proposals when the assets of a plan 
                        invested in the issuer relative to the total 
                        assets of such plan are below 5 percent (or, in 
                        the event such assets are under management, 
                        when the assets under management invested in 
                        the issuer are below 5 percent of the total 
                        assets under management).
                  ``(C) Exception.--No proxy voting policy adopted 
                pursuant to this paragraph shall preclude a fiduciary 
                from submitting a proxy vote when the fiduciary 
                determines that the matter being voted on is expected 
                to have a material economic effect on the investment 
                performance of a plan's portfolio (or the investment 
                performance of assets under management in the case of 
                an investment manager); provided, however, that in all 
                cases compliance with a safe harbor voting policy shall 
                be presumed to satisfy fiduciary responsibilities with 
                respect to decisions not to vote.
          ``(6) Review.--A fiduciary shall periodically review any 
        policy adopted under this subsection.''.
  (b) Effective Date.--The amendments made by subsection (a) shall 
apply to an exercise of shareholder rights occurring on or after 
January 1, 2024.

                                Purpose

    Employee benefit plans have one purpose: to provide 
employee benefits. Employee benefit plan assets have one 
purpose: to fund those benefits. The Employee Retirement Income 
Security Act of 1974 (ERISA) was designed to ensure that the 
financial interests of participants and beneficiaries in their 
benefits do not take a back seat to the political and social 
preferences of investment fiduciaries. The Biden 
administration's interpretation of ERISA pushes plans to 
outsource proxy voting decisions to proxy advisory firms that 
aggregate those votes and to exercise those votes on matters 
that may be driven by political or social preferences. H.R. 
5337 ensures that shareholder rights, including proxy votes 
appurtenant to ERISA plan assets, are used only to promote the 
economic interests of plan participants in their benefits.

                            Committee Action


                             117TH CONGRESS

Second Session--Hearings

    On February 26, 2022, the Committee on Education and Labor, 
Subcommittee on Health, Employment, Labor, and Pensions, held a 
hearing titled ``Improving Retirement Security and Access to 
Mental Health Benefits.'' The hearing discussed the Biden 
administration's attempt to put its radical environmental and 
social agendas above the financial interests of retirees by 
prioritizing environmental, social, and governance (ESG) 
factors when investing retirement plan assets. Testifying 
before the Subcommittee were Dr. Andrew Biggs, Resident 
Scholar, American Enterprise Institute, Washington, D.C.; Karen 
Handorf, Senior Counsel, Berger Montague, Washington, D.C.; Amy 
Matsui, Director of Income Security and Senior Counsel, 
National Women's Law Center, Washington, D.C.; and Aron 
Szapiro, Head of Retirement Studies and Public Policy, 
Morningstar Investment Management, Washington, D.C.
    On June 14, 2022, the Committee on Education and Labor held 
a hearing titled ``Examining the Policies and Priorities of the 
U.S. Department of Labor'' to review the Fiscal Year 2023 
budget priorities of the U.S. Department of Labor (DOL). 
Testifying before the Committee was the Honorable Martin J. 
Walsh, Secretary, DOL, Washington, D.C. At this hearing, 
concerns were discussed regarding the DOL's proposed rule 
titled ``Prudence and Loyalty in Selecting Plan Investments and 
Exercising Shareholder Rights,'' including the Biden 
administration's efforts to undermine an investment fiduciary's 
duties of loyalty when voting proxies for ERISA plans.

                             118TH CONGRESS

First Session--Hearings

    On June 7, 2023, the Committee on Education and the 
Workforce held a hearing on ``Examining the Policies and 
Priorities of the U.S. Department of Labor'' to review the 
Fiscal Year 2023 budget priorities of DOL. Testifying before 
the Committee was the Honorable Julie Su, Acting Secretary, 
DOL, Washington, D.C. At this hearing, DOL's December 1, 2022, 
final rule titled ``Prudence and Loyalty in Selecting Plan 
Investments and Exercising Shareholder Rights'' was discussed, 
including concerns regarding the Biden administration's efforts 
to undermine an investment fiduciary's duties of prudence and 
loyalty when selecting and monitoring investments for ERISA 
plans and the administration's support for incorporating ESG 
into the administration of ERISA plans.

First Session--Legislative Action

    On February 7, 2023, Rep. Andy Barr (R-KY) introduced a 
joint resolution of disapproval (H.J. Res. 30) under the 
Congressional Review Act (CRA) to nullify the Biden 
administration's DOL final rule titled ``Prudence and Loyalty 
in Selecting Plan Investments and Exercising Shareholder 
Rights.'' The resolution rescinds the Biden administration's 
rule and would have the effect of reinstating the Trump 
administration's November 13, 2020, rule titled ``Financial 
Factors in Selecting Plan Investments'' which included language 
on proxy voting for ERISA plans. On February 28, 2023, the 
House of Representatives passed H.J. Res. 30 by a vote of 219-
210, with Senate passage on March 1 by a vote of 50-46. On 
March 20, the President vetoed the measure. On March 23, the 
House failed to override the veto by a vote of 219-200.
    On September 5, 2023, Rep. Erin Houchin (R-IN) introduced 
the Retirement Proxy Protection Act (H.R. 5337). The bill was 
referred to the Committee on Education and the Workforce. On 
September 14, 2023, the Committee considered H.R. 5337 in 
legislative session and reported it favorably, as amended, to 
the House of Representatives by a recorded vote of 23-19. The 
Committee adopted an Amendment in the Nature of a Substitute 
offered by Chairwoman Virginia Foxx (R-NC) that made technical 
changes. Rep. Mark DeSaulnier (R-CA) offered a substitute 
amendment codifying the Biden administration ESG and proxy 
voting rule. The substitute amendment failed by a recorded vote 
of 19-23.

                            Committee Views


                              INTRODUCTION

    H.R. 5337, the Retirement Proxy Protection Act, clarifies 
that acts to exercise shareholder rights and vote proxies in 
ERISA plans must be for the exclusive purpose of providing 
benefits under the plan and solely in the economic interest of 
the plan. The bill clarifies that plan assets may not be used 
to advance or promote interests other than the financial 
interests of participants and beneficiaries in their benefits 
under the plan. Accordingly, the bill amends ERISA to provide 
that it does not require the voting of every proxy or the 
exercise of every shareholder right. ERISA, together with U.S. 
Supreme Court precedent, already set forth the requirement that 
a fiduciary's duty to act solely in the interests of 
participants and beneficiaries means to act solely in their 
pecuniary interest in the benefits provided under the plan. 
However, the Biden administration's DOL has ignored the statute 
and Supreme Court precedent. H.R. 5337 provides clear 
guideposts for ERISA plan fiduciaries while reflecting the 
fiduciary principles inherent in ERISA since its enactment in 
1974. H.R. 5337 protects the retirement savings of the U.S. 
workforce, which is the purpose of ERISA.

The duty of prudence and loyalty under existing law

    Under ERISA an investment fiduciary must act solely in the 
interest of participants and beneficiates and for the exclusive 
purpose of providing benefits to participants and their 
beneficiaries and defraying reasonable expenses of 
administering the plan (the ``exclusive purpose rule'').\1\ 
Courts have stated that ERISA's exclusive purpose rule requires 
fiduciaries to act with ``complete and undivided loyalty to the 
beneficiaries''\2\ and to make decisions ``with an eye single 
to the interests of participants and beneficiaries.''\3\
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    \1\ERISA Sec. Sec. 403(c), 404(a); 29 U.S.C. Sec. Sec. 1103(c), 
1104(a). Hereinafter, this fiduciary duty is referred to as the 
``exclusive purpose rule.''
    \2\Donavan v. Mazzola, 716 F.2d 1226, 1238 (9th Cir. 1983) 
(citation omitted).
    \3\Donavan v. Bierwirth, 680 F.2d 263, 271 (2nd Cir. 1982).
---------------------------------------------------------------------------
    In 2014, the U.S. Supreme Court unanimously rejected non-
pecuniary public policy goals as a basis for relaxing ERISA's 
fiduciary standards.\4\ The Court held that ERISA's duty of 
prudence does not vary depending on a non-pecuniary goal, even 
if that goal is set out in the plan document,\5\ stating:
---------------------------------------------------------------------------
    \4\Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014) 
(rejecting a ``presumption of prudence'' for acquisition and holding of 
employer stock based on the non-pecuniary benefit of employee stock 
ownership).
    \5\Id. at 420 (``We cannot accept the claim . . . that the content 
of ERISA's duty of prudence varies depending on the specific 
nonpecuniary goal set out in an ERISA plan.'')

          Read in the context of ERISA as a whole, the term 
        ``benefits'' . . . must be understood to refer to the 
        sort of financial benefits (such as retirement income) 
        that trustees who manage investments typically seek to 
        secure for the trust's beneficiaries. . . . The term 
        does not cover nonpecuniary benefits like those 
        supposed to arise from employee ownership of employer 
        stock.\6\
---------------------------------------------------------------------------
    \6\Id. at 421.

    The Court's holding applies to all non-pecuniary benefits. 
Thus, under ERISA, there is no room for advancing collateral 
goals such as ESG by exercising shareholder rights (such as 
proxy votes) appurtenant to plan assets at the expense of the 
economic interest of the plan and its participants and 
beneficiaries.
    ERISA also requires a fiduciary to act ``with the care, 
skill, prudence, and diligence under the circumstances then 
prevailing that a prudent man acting in a like capacity and 
familiar with such matters would use in the conduct of an 
enterprise of like character.''\7\ Thus, fiduciaries are held 
to an expert prudence standard. However, for the last 30 years, 
there have been attempts to erode ERISA's principles of 
prudence and loyalty in order to promote benefits other than 
the financial interest of participants and beneficiaries (i.e., 
``collateral benefits'') through the exercise of shareholder 
rights, including proxy voting exercised in the aggregate by 
proxy voting advisory firms.
---------------------------------------------------------------------------
    \7\ERISA Sec. 404(a)(1)(B); 29 U.S.C. Sec. 1104(a)(1)(B).
---------------------------------------------------------------------------

Exercising shareholder rights and voting proxies in ERISA plans

    DOL's longstanding position is that the fiduciary act of 
managing plan assets includes the management of voting rights 
(as well as other shareholder rights) that are inherent in a 
plan's investments.\8\ ERISA fiduciaries have interpreted DOL's 
guidance on proxy voting as a regulatory mandate to vote all 
proxies associated with assets held by an ERISA plan.\9\ That 
is, many institutional investors have historically interpreted 
DOL guidance to require fiduciaries to vote every share on 
every matter on a proxy.\10\
---------------------------------------------------------------------------
    \8\See Fiduciary Duties Regarding Proxy Voting and Shareholder 
Rights, 85 Fed. Reg. 81,658 (Dec. 16, 2020). Id. at 81,658 (discussing 
letter from Alan D. Leibowitz, Deputy Assistant Secretary, to Helmuth 
Fandl, Chairman of the Retirement Board, Avon Products, Inc. (Feb. 23, 
1988)).
    \9\See James K. Glassman & J. W. Verret, Mercatus Ctr. George Mason 
Univ., How to Fix Our Broken Proxy Advisory System 5, (2013) (``changes 
at [DOL] in the 1980s mandat[ed] that ERISA pension plan fiduciaries--
such as union, corporate, and other officials who control or manage a 
plan's assets--vote the plan's shares on the basis of active analysis, 
regardless of whether or not the fiduciary was certain that expending 
time and effort to analyze how to vote would create value for a 
fund.'') (internal citation omitted).
    \10\See Interpretive Bulletin 94-2: Interpretive Bulletin relating 
to written statements of investment policy, including proxy voting or 
guidelines, 59 Fed. Reg. 38,860, 81,659 n.17 (July 29, 1994) (quoting 
comment letter); Fiduciary Duties Regarding Proxy Voting and 
Shareholder Rights, 85 Fed. Reg. 81,658, 81,666 (Dec. 16, 2020) (Trump 
administration proxy voting rule was intended ``to correct a 
misunderstanding among some fiduciaries and other stakeholders that 
ERISA requires every proxy to be voted.'').
---------------------------------------------------------------------------
    As a result, plan fiduciaries turned to proxy advisor firms 
to vote proxies for the plan's investment holdings to comply 
with a perceived regulatory mandate.\11\ In 1985, seeing an 
opportunity to fill a void in the market created by DOL, a 
former high-ranking DOL official founded Institutional 
Shareholder Services, Inc. (ISS) to provide proxy voting 
services while spreading the cost across its many 
customers.\12\ By 2013, ISS, together with another proxy 
advisory firm, Glass, Lewis & Co., LLC (Glass Lewis), had a 
combined market share of 97 percent (61 percent for ISS and 36 
percent for Glass Lewis).\13\ By 2020, ISS reported that it 
voted over 10 million ballots annually on behalf of clients 
representing 4.2 trillion shares in about 44,000 shareholder 
meetings.\14\ At the same time, Glass Lewis reported it 
provided services to 1,300 clients collectively managing more 
than $35 trillion in assets in about 20,000 shareholder 
meetings across 100 global markets per year.\15\
---------------------------------------------------------------------------
    \11\See U.S. Gov't Accountability Off., GAO-17-47, Corporate 
Shareholder Meetings: Proxy Advisory Firms' Role in Voting and 
Corporate Governance Practices (2016) (discussing increasing demand for 
proxy advisory firm services among institutional investors such as 
pension plans).
    \12\ISS, 25for25: Observations on the Past, Present, and Future of 
Corporate Governance, in Celebration of ISS' 25th Anniversary iv 
(``[I]n 1985, Robert A.G. Monks founded Institutional Shareholder 
Services . . . with one simple goal: to help asset owners, and by 
extension, asset managers, to carry out their fiduciary obligations to 
vote their shares in a thoughtful and informed fashion.''); see also 
Labor Dept. Post Filled by Robert A.G. Monks, N.Y. Times (Dec. 23, 
1983).
    \13\James K. Glassman & J. W. Verret, supra note 9.
    \14\Exemptions from the Proxy Rules for Proxy Voting Advice, 85 
Fed. Reg. 55,082, 55,126 (Sept. 3, 2020).
    \15\Id. at 55,127.
---------------------------------------------------------------------------
    In short, ISS and Glass Lewis dominate the proxy advisory 
market.\16\ The widespread reliance on proxy advisory firms 
gives these firms tremendous influence as they vote and 
otherwise wield significant influence on corporate governance 
matters. According to a Mercatus Center study, ``These firms 
weigh in on issues such as the composition and operation of 
corporate boards, disclosure and compensation practices, and 
companies' policies on recycling, renewable energy, and 
political contributions.''\17\ The Wall Street Journal 
Editorial Board wrote that ISS and Glass Lewis are ``the real 
driving force behind'' an onslaught of ESG proxy resolutions 
from progressive investors.\18\ Both ISS and Glass Lewis are 
foreign-owned.\19\ Neither proxy advisory firm appears to have 
significant investment in the success of the companies over 
which the proxy advisory firms wield such power. Instead, the 
economic impact of the ESG proxy voting policies of ISS and 
Glass Lewis affects ERISA plans and shareholders at large.
---------------------------------------------------------------------------
    \16\Editorial, Cracking the Proxy Advisory Duopoly, Wall St. J. 
(July 13, 2023) (ISS and Glass Lewis ``boast outsize clout in U.S. 
corporate elections and make up an estimated 97% of the proxy advisory 
market,'' citing a 2018 article in the Harvard Law School Forum on 
Corporate Governance finding that ``the two firms can swing between 10% 
and 30% of the shareholder votes'').
    \17\James K. Glassman & Hester Pierce, supra note 9, at 1.
    \18\The Editorial Board, Cracking the Proxy Advisory Duopoly, Wall 
Street Journal (July 13, 2023).
    \19\Id.
---------------------------------------------------------------------------
    ISS benchmark policy proxy voting guidelines for the United 
States demonstrate the activist agenda. For example, the 
guidelines state:

          For companies that are significant greenhouse gas . . 
        . emitters . . . generally vote against or withhold 
        from the incumbent chair of the responsible committee 
        (or other directors on a case-by case basis) in cases 
        where ISS determines that the company is not taking the 
        minimum steps needed to understand, assess, and 
        mitigate risks related to climate change to the company 
        and the larger economy.\20\
---------------------------------------------------------------------------
    \20\ISS, Americas Proxy Voting Guidelines Benchmark Policy Changes 
for 2023: U.S., Canada, Brazil, and Americas Regional, available at 
https://www.issgovernance.com/file/policy/latest/updates/Americas-
Policy-Updates.pdf.

    ISS proxy voting guidelines include policies for gender 
diversity on board composition and an entire section dedicated 
to ``Social and Environmental Issues,'' including racial 
equity, political expenditures, and lobbying Congress.
    Similarly, Glass Lewis proxy voting guidelines for the 
United States also demonstrate its activist agenda. For 
example, the guidelines provide that Glass Lewis ``will 
generally recommend against a nominating and governance 
committee chair at companies in the Russell 1000 index if the 
company has not provided any disclosure of director diversity 
and skills in any of our tracked categories. . . .''\21\ 
Tracked categories include a ``percentage-based approach to 
board gender diversity.'' The guidelines also provide that ``we 
will generally recommend against the chair of the nominating 
committee of a board with fewer than one director in an 
underrepresented community. . . .'' The policy guidelines 
further extend to consideration of exposure to risk ``resulting 
from climate change or membership in trade associations with 
controversial political ties.'' In a search of the guidelines, 
``diversity'' appears 47 times and ``climate'' appears 22 
times.
---------------------------------------------------------------------------
    \21\Glass Lewis, United States 2023 Policy Guidelines, available at 
https://www.glasslewis.com/wp-content/uploads/2022/11/US-Voting-
Guidelines-2023-GL.pdf?hsCtaTracking=45ff0e63-7af7-4e28-ba3c-
7985d01e390a%7C74c0265a-20b3-478c-846b-69784730ccbd.
---------------------------------------------------------------------------
    In addition, proxy voting firms may have conflicts of 
interest.\22\ Besides proxy advisory services, ISS provides 
advisory consulting services and other products and services 
through ISS Corporate Solutions, Inc. (a wholly owned 
subsidiary).\23\ As early as 2007, the U.S. Government 
Accountability Office found potential conflicts of interest 
between the consulting services provided by ISS and its proxy 
advisory services that could affect vote recommendations.\24\ 
ISS may also advise companies on how to frame proposals to get 
the most votes.\25\ At best, ISS advice influences the 
management of a corporation to adopt ISS policy preferences. At 
worst, a corporation purchases ISS advice in order to ensure an 
ISS affirmative vote on the corporation's proxy initiatives.
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    \22\Exemptions from the Proxy Rules for Proxy Voting Advice, 85 
Fed. Reg. 55,082, 55,126 (Sept. 3, 2020).
    \23\Id.
    \24\U.S. Gov't Accountability Off., Gao 17-47, Corporate 
Shareholder Meetings: Proxy Advisory Firms' Role in Voting and 
Corporate Governance Practices 9 (2016) (``[V]arious conflicts of 
interest can arise that have the potential to influence the research 
conducted and voting recommendations made by proxy advisory firms. The 
most commonly cited potential for conflict involves ISS, which provides 
services to both institutional investor clients and corporate clients. 
. . .'').
    \25\James K. Glassman & Hester Pierce, supra note 9, at 2 (proxy 
advisory firms may advise companies, including how to help their 
ratings and get votes, and such conflicts of interest can affect 
recommendations).
---------------------------------------------------------------------------

Trump administration ESG rule

    In December 2020, the Trump administration issued a final 
rule on proxy voting.\26\ Key elements included the following 
provisions:
---------------------------------------------------------------------------
    \26\Fiduciary Duties Regarding Proxy Voting and Shareholder Rights, 
85 Fed. Reg. 81,658 (Dec. 16, 2020).
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           ERISA does not require the voting of every 
        proxy or the exercise of every shareholder right.
           Shareholder activities may not promote 
        nonpecuniary benefits or goals unrelated to the 
        financial interests of the plan's participants and 
        beneficiaries in the retirement income or financial 
        benefits under the plan.
           Fiduciaries must maintain records on proxy 
        voting activities or other exercises of shareholder 
        rights.
           Fiduciaries who delegate authority to 
        exercise shareholder rights must prudently monitor such 
        activities for compliance with ERISA.
           Fiduciaries may adopt proxy voting policies 
        designed to serve the plan's economic interests. A 
        proxy voting policy that meets the following safe 
        harbors shall be deemed to meet the plan's economic 
        interests:
                   Limiting proxy voting to 
                particular types of proposals that the 
                fiduciary has prudently determined are 
                substantially related to the issuer's business 
                activities or are expected to have a material 
                effect on the value of the plan's investment in 
                relation to the plan's portfolio as a whole.
                   Refraining from voting on 
                proposals when the plan's holding in a single 
                issuer relative to the plan's total investment 
                assets is below a quantitative threshold that 
                the fiduciary prudently determines is 
                sufficiently small that the matter being voted 
                on is not expected to have a material economic 
                effect on the investment performance of the 
                plan's portfolio (or investment performance of 
                assets under management in the case of an 
                investment manager).

Biden administration proxy rule

    In December 2022, DOL issued a final ESG rule that 
superseded the Trump rule on proxy voting, in effect rescinding 
the Trump rule.\27\ As a result, the current rule does not 
include any of the Trump rule requirements listed above. In the 
December 2022 rule, DOL claimed the Trump proxy voting 
regulations put the thumb on the scale against ESG factors.\28\ 
DOL also claimed the Trump rule ``may be deterring fiduciaries 
from taking steps that other marketplace investors would take 
in . . . improving investment portfolio resistance against the 
potential financial risks associated with climate change and 
other ESG factors.''\29\
---------------------------------------------------------------------------
    \27\Prudence and Loyalty in Selecting Plan Investments and 
Exercising Shareholder Rights, 87 Fed. Reg. 73,822 (Dec. 1, 2022).
    \28\Id. at 73,854.
    \29\Id. at 73,826.
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Impact on the retirement savings of America's workers

    DOL's subterfuge on proxy voting is not harmless. Imposing 
proxy voting mandates that push ERISA plans to use foreign-
owned proxy advisory firms with activist agendas opens up ERISA 
plan assets for the exploitation of those who have no ownership 
interest in the assets. Ultimately, DOL's agenda promotes the 
use of ERISA plan assets to advance collateral benefits such as 
ESG and thus undermines a central cornerstone of ERISA. 
Further, such actions may lead to increased risk and lower 
returns for retirement savings. The cumulative harm, over a 
lifetime of retirement saving, could have a substantial adverse 
impact on a participant's lifestyle and welfare during his or 
her retirement years.

H.R. 5337, Retirement Proxy Protection Act

    H.R. 5337 protects the retirement savings and other ERISA-
covered benefits of the U.S. workforce and reinforces what the 
Supreme Court has already stated: The exclusive purpose rule of 
ERISA precludes the consideration of nonpecuniary benefits.\30\ 
ERISA's duty of loyalty does not provide any opportunity for a 
proxy advisory firm or any other party to use ERISA plan assets 
to promote nonpecuniary benefits such as ESG considerations. 
H.R. 5337 repeals DOL's perceived regulatory mandate to vote 
all proxies, which has fueled the use of activist proxy 
advisory firms that seek to promote ESG goals even at the 
expense of the economic welfare of ERISA plan participants and 
beneficiaries.
---------------------------------------------------------------------------
    \30\Fifth Third Bancorp, 573 U.S. 409, 421 (2014) (the ``benefits'' 
to be pursued by ERISA fiduciaries as their ``exclusive purpose'' does 
not include ``nonpecuniary benefits'') (emphasis in original).
---------------------------------------------------------------------------

                               CONCLUSION

    To protect the financial interests of participants and 
beneficiaries in their benefits, and to reinforce ERISA's 
existing duties of prudence and loyalty, H.R. 5337 ensures that 
ERISA's duties of prudence and loyalty will be honored by 
taking proxy voting out of the hands of foreign-owned proxy 
advisory firms. The intent of ERISA's exclusive purpose rule, 
as enacted by Congress and as affirmed by the U.S. Supreme 
Court, remains as clear now as when it was first signed into 
law. However, the Biden administration's regulations and 
activist agendas are undermining ERISA's protections. The Biden 
administration seeks to divert the shareholder rights 
appurtenant to ERISA plan assets to foreign-owned proxy 
advisory firms that use these ERISA plan assets to advance an 
activist agenda such as ESG considerations. H.R. 5337 is 
essential for restoring and upholding the intent of ERISA. The 
U.S. workforce deserves nothing less.

                                Summary


                  H.R. 5337 SECTION-BY-SECTION SUMMARY

Section 1. Short title

           Names the bill as the ``Retirement Proxy 
        Protection Act.''

Section 2. Exercise of shareholder rights

    Section 2(a) amends ERISA, adding the following provisions:
           States that the fiduciary duty to manage 
        plan assets that are shares of stock includes the 
        management of shareholder rights appurtenant to those 
        shares, including the right to vote proxies.
           States that when deciding to exercise a 
        shareholder right and when exercising such right, 
        including the proxies, a fiduciary must act prudently 
        and solely in the interests of participants and 
        beneficiaries and for the exclusive purpose of 
        providing benefits to participants and beneficiaries 
        and defraying reasonable expenses of administering the 
        plan.
           Clarifies that the fiduciary duty to manage 
        shareholder rights appurtenant to shares of stock does 
        not require the voting of every proxy or the exercise 
        of every shareholder right.
           Clarifies that H.R. 5337 does not apply to 
        the voting, tender, and similar rights with respect to 
        securities that are passed through pursuant to the 
        terms of an individual account plan to participants and 
        beneficiaries with accounts holding such securities.
           Sets forth a fiduciary's six duties and 
        obligations when deciding whether to exercise a 
        shareholder right and when exercising a shareholder 
        right:
                   The fiduciary must act solely in 
                accordance with the economic interest of the 
                plan and its participants and beneficiaries.
                   The fiduciary must consider any 
                costs involved.
                   The fiduciary must evaluate 
                material facts that form the basis for any 
                particular proxy vote or exercise of 
                shareholder rights.
                   The fiduciary must maintain a 
                record of any proxy vote, any proxy voting 
                activity, or other exercise of a shareholder 
                right, including any attempt to influence 
                management.
                   The fiduciary shall not 
                subordinate the interests of participants and 
                beneficiaries in their retirement income or 
                other financial benefits under the plan to any 
                non-pecuniary objective.
                   The fiduciary shall not promote 
                non-pecuniary benefits or goals unrelated to 
                those financial interests of the plan's 
                participants and beneficiaries in their 
                benefits under the plan.
           States that a fiduciary shall exercise 
        prudence and diligence in the selection and monitoring 
        of a person, if any, selected to advise or otherwise 
        assist with the exercise of shareholder rights, 
        including by providing research and analysis, 
        recommendations on the exercise of proxy voting or 
        other shareholder rights, administrative services with 
        respect to voting proxies, and recordkeeping and 
        reporting services.
           States that in the event the authority to 
        vote proxies or exercise shareholder rights is 
        delegated to an investment manager pursuant to ERISA, 
        or to a proxy voting firm, or other person who performs 
        advisory services as to the voting of proxies or the 
        exercise of shareholder rights, a responsible plan 
        fiduciary shall monitor the proxy voting activities of 
        such investment manager or advisory firm and determine 
        whether such activities are in compliance with the six 
        obligations and duties set forth in H.R. 5337.
           Provides that in order to meet its duties 
        under ERISA, a responsible plan fiduciary may adopt a 
        proxy voting policy for deciding whether to vote a 
        proxy, provided that the authority to vote a proxy is 
        exercised pursuant to specific parameters designed to 
        serve the economic interests of the plan.
           Sets forth two safe harbor proxy voting 
        policies under which a fiduciary will automatically 
        satisfy his or her fiduciary duties with respect to a 
        decision not to vote a proxy.
                   The first safe harbor is a 
                voting policy that limits voting resources to 
                particular types of proposals that the 
                fiduciary has prudently determined are 
                substantially related to the business 
                activities of the issuer or are expected to 
                have a material effect on the value of the plan 
                investment.
                   The second safe harbor is a 
                voting policy under which the fiduciary will 
                refrain from voting on all proposals or on 
                particular types of proposals when the assets 
                of a plan invested in the plan are a small 
                proportion of plan assets. (H.R. 5337 sets the 
                proportion at 5 percent of plan assets, or in 
                the case of assets under management, at 5 
                percent of the plan's total assets under 
                management by a particular investment manager 
                for a plan.)
           Provides that a fiduciary shall not be 
        precluded from voting a proxy when the fiduciary 
        determines that such action is expected to have a 
        material economic effect on the investment performance 
        of the plan's portfolio (or the investment performance 
        of assets under management in the case of an investment 
        manager).
           Provides that a fiduciary shall review any 
        policy adopted under H.R. 5337.
    Section 2(b) provides that the amendments made by the bill 
apply to an exercise of shareholder rights occurring on or 
after January 1, 2024.

                       EXPLANATION OF AMENDMENTS

    The amendments, including the amendment in the nature of a 
substitute, are explained in the body of this report.

              APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

    Section 102(b)3 of Public Law 104-1 requires a description 
of the application of this bill to the legislative branch. H.R. 
5337 takes important steps to protect the interests of the 
workforce in their benefits provided under ERISA plans with 
respect to proxy voting. H.R. 5337 is applicable only to 
investments subject to ERISA and therefore does not affect the 
legislative branch.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended 
by Section 101(a)(2) of the Unfunded Mandates Reform Act of 
1995, Pub. L. No. 104-4), the Committee adopts as its own the 
cost estimate prepared by the Director of the Congressional 
Budget Office (CBO) pursuant to section 402 of the 
Congressional Budget and Impoundment Control Act of 1974.

                           Earmark Statement

    H.R. 5337 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.


         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House rule XIII, the 
goal of H.R. 5337 is to protect the interests of the workforce 
in their benefits provided under ERISA plans with respect to 
proxy voting.

                    Duplication of Federal Programs

    No provision of H.R. 5337 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the committee's oversight findings and recommendations are 
reflected in the body of this report.

            Required Committee Hearing and Related Hearings

    In compliance with clause 3(c)(6) of rule XIII of the Rules 
of the House of Representatives, the following hearing held 
during the 118th Congress was used to develop or consider H.R. 
5337: ``Examining the Policies and Priorities of the U.S. 
Department of Labor''.

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following estimate for H.R. 5337 from the Director of the 
Congressional Budget Office:




    Bill summaries: On September 14, 2023, the Committee on 
Education and the Workforce ordered to be reported four bills 
related to the investments of retirement plans. This document 
provides estimates for each piece of legislation.
    Generally, the bills would:
           Change the standards that the fiduciaries of 
        private pension plans must use when making investment 
        decisions, including decisions on whether and how to 
        vote proxies and decisions about selecting plan 
        employees.
           Require plans to provide information to 
        participants investing in brokerage windows, which 
        allow participants to select from a broad variety of 
        investments.
    Background: Under the Employee Retirement Income Security 
Act of 1974 (ERISA), fiduciaries of private pension plans must 
act in the interest of plan participants, including when making 
investment decisions. The rule ``Financial Factors in Selecting 
Plan Investments,'' issued on November 13, 2020, required 
fiduciaries to make investment decisions based solely on 
``pecuniary factors.'' That rule included a ``tiebreaker'' 
standard, under which fiduciaries could consider other benefits 
when ``alternative investment options are economically 
indistinguishable.'' A related rule, ``Fiduciary Duties 
Regarding Proxy Voting and Shareholder Rights,'' issued on 
December 16, 2020, guided whether and how fiduciaries were to 
exercise proxy votes. That rule stated that fiduciaries must 
make such decisions ``for the exclusive purpose of providing 
benefits to participants.''
    On December 1, 2022, the Department of Labor (DOL) issued a 
new rule, ``Prudence and Loyalty in Selecting Plan Investments 
and Exercising Shareholder Rights,'' which clarified how plan 
fiduciaries may consider climate change and other 
environmental, social, or governance (commonly referred to as 
ESG) factors when making investment decisions. Under the new 
regulation, fiduciaries may consider ``the economic effects of 
climate change and other environmental, social, or governance 
factors,'' but investment decisions ``may not subordinate the 
interests of the participants and beneficiaries in their 
retirement income or financial benefits under the plan to other 
objectives, and may not sacrifice investment return or take on 
additional investment risk.''
    For additional background, see CBO's estimate of H.J. Res. 
30, which disapproved the 2022 rule. The resolution was 
approved by the Congress but vetoed by the President, so that 
rule remains in effect.
    Estimated Federal cost: The costs of the legislation fall 
within budget function 600 (income security).
    Basis of estimate: CBO and the staff of the Joint Committee 
on Taxation (JCT) estimate that none of the bills would affect 
expected revenues or net direct spending. CBO estimates that 
implementing each of the bills would affect spending subject to 
appropriation. This cost estimate does not include any effects 
of interaction among the bills. If all four bills were combined 
and enacted as a single piece of legislation, CBO expects that 
the net difference in estimated costs would be insignificant.
    H.R. 5337, the Retirement Proxy Protection Act, would 
specify plans' obligations relating to proxy voting. It would 
reinstate many of the provisions included in the December 2020 
rule ``Fiduciary Duties Regarding Proxy Voting and Shareholder 
Rights.''
    H.R. 5338, the No Discrimination in My Benefits Act, would 
require that any selection of plan employees or service 
providers be made ``without regard to race, color, religion, 
sex, or national origin.''
    H.R. 5339, the RETIRE Act, would reinstate many of the 
provisions in the November 2020 rule ``Financial Factors in 
Selecting Plan Investments.''
    H.R. 5340, the Providing Complete Information to Retirement 
Investors Act, would require the provision of additional 
information to plan participants before they select nonstandard 
investments. In self-directed pension plans, such as 401(k)s, 
participants generally select from a menu of designated 
investment alternatives offered by the plan. Some plans also 
offer ``brokerage windows,'' which allow participants access to 
a broad variety of investments.
    Direct spending and revenues: Enacting H.R. 5337, H.R. 
5338, or H.R. 5339 could affect federal revenues if the amount 
that individuals or employers contribute to tax-preferred plans 
changed. Additionally, premiums (which are recorded as 
offsetting receipts and reduce direct spending) received by the 
Pension Benefit Guaranty Corporation could be affected because 
those premiums are based in part on the amount of plan assets.
    However, because fiduciaries must maximize investment 
performance, CBO and JCT do not expect H.R. 5337, H.R. 5338, or 
H.R. 5339 to substantially affect investment outcomes. 
Projections of investment returns are inherently uncertain, but 
we expect an equally likely chance of small increases or small 
decreases in federal revenues and outlays stemming from this 
resolution. The new rule may induce individual employers and 
workers to raise or lower their pension contributions, but CBO 
and JCT project that total contributions will not change and 
thus there would be no effect on expected revenues and net 
direct spending.
    Under H.R. 5340, plans would be required to warn 
participants in brokerage windows about the extra potential 
risk associated with those investents. CBO and JCT do not 
expectH.R. 5340 to significantly change participants' 
investment choices, and to the extent that they do change, we expect an 
equally likely chance of small increases or small decreases in federal 
revenues and outlays.
    Spending subject to appropriation: CBO estimates that each 
of the bills would increase spending subject to appropriation 
by insignificant amounts, less than $500,000 over the 2023-2028 
period. The administrative burden on DOL to issue the 
regulations associated with the legislation would be minimal. 
Based on experience with similar changes, CBO estimates that 
administrative costs would be insignificant. Any such spending 
would be subject to the availability of appropriated funds.
    Pay-As-You-Go considerations: None.
    Increase in long-term net direct spending and deficits: 
None.
    Mandates: H.R. 5337 would impose a private-sector mandate 
as defined in the Unfunded Mandates Reform Act (UMRA) by 
prohibiting ERISA plan fiduciaries from prioritizing a non-
pecuniary objective when exercising shareholder rights. CBO 
estimates that the cost of the mandate would not exceed the 
private-sector threshold established in UMRA ($198 million in 
2023, adjusted annually for inflation). The bill would not 
impose any intergovernmental mandates.
    CBO has not reviewed H.R. 5338 for intergovernmental or 
private-sector mandates. Section 4 of UMRA excludes from the 
application of that act any legislative provisions that would 
establish or enforce statutory rights prohibiting 
discrimination. CBO has determined that this legislation falls 
within that exclusion because it would prohibit discrimination 
in hiring or retaining personnel based on race, color, 
religion, sex, or national origin.
    H.R. 5339 would not impose any private-sector or 
intergovernmental mandates as defined in UMRA.
    H.R. 5340 would impose a private-sector mandate as defined 
in UMRA by requiring pension plans that offer brokerage windows 
to warn participants of potential risk associated with 
alternative investments. Because of the small burden associated 
with providing an additional warning, CBO estimates that the 
cost of the mandate would not exceed the private-sector 
threshold established in UMRA ($198 million in 2023, adjusted 
annually for inflation). The bill would not impose any 
intergovernmental mandates.
    Estimate prepared by: Federal costs: Noah Meyerson; Federal 
revenues: Staff of the Joint Committee on Taxation; Mandates: 
Staff of the Joint Committee on Taxation and Andrew Laughlin.
    Estimate reviewed by: Justin Humphrey, Chief, Finance, 
Housing, and Education Cost Estimates Unit; Kathleen 
FitzGerald, Chief, Public and Private Mandates Unit; H. Samuel 
Papenfuss, Deputy Director of Budget Analysis.
    Estimate approved by: Phillip L. Swagel, Director, 
Congressional Budget Office.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 5337. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when, as with the present report, 
the committee adopts as its own the cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

            EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974




           *       *       *       *       *       *       *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS

           *       *       *       *       *       *       *



Subtitle B--Regulatory Provisions

           *       *       *       *       *       *       *



Part 4--Fiduciary Responsibility

           *       *       *       *       *       *       *



                            FIDUCIARY DUTIES

  Sec. 404. (a)(1) Subject to sections 403(c) and (d), 4042, 
and 4044, a fiduciary shall discharge his duties with respect 
to a plan solely in the interest of the participants and 
beneficiaries and--
          (A) for the exclusive purpose of:
                  (i) providing benefits to participants and 
                their beneficiaries; and
                  (ii) defraying reasonable expenses of 
                administering the plan;
          (B) with the care, skill, prudence, and diligence 
        under the circumstances then prevailing that a prudent 
        man acting in a like capacity and familiar with such 
        matters would use in the conduct of an enterprise of a 
        like character and with like aims;
          (C) by diversifying the investments of the plan so as 
        to minimize the risk of large losses, unless under the 
        circumstances it is clearly prudent not to do so; and
          (D) in accordance with the documents and instruments 
        governing the plan insofar as such documents and 
        instruments are consistent with the provisions of this 
        title and title IV.
  (2) In the case of an eligible individual account plan (as 
defined in section 407(d)(3)), the diversification requirement 
of paragraph (1)(C) and the prudence requirement (only to the 
extent that it requires diversification) of paragraph (1)(B) is 
not violated by acquisition or holding of qualifying employer 
real property or qualifying employer securities (as defined in 
section 407(d)(4) and (5)).
  (b) Except as authorized by the Secretary by regulation, no 
fiduciary may maintain the indicia of ownership of any assets 
of a plan outside the jurisdiction of the district courts of 
the United States.
  (c)(1)(A) In the case of a pension plan which provides for 
individual accounts and permits a participant or beneficiary to 
exercise control over assets in his account, if a participant 
or beneficiary exercises control over the assets in his account 
(as determined under regulations of the Secretary)--
          (i) such participant or beneficiary shall not be 
        deemed to be a fiduciary by reason of such exercise, 
        and
          (ii) no person who is otherwise a fiduciary shall be 
        liable under this part for any loss, or by reason of 
        any breach, which results from such participant's or 
        beneficiary's exercise of control, except that this 
        clause shall not apply in connection with such 
        participant or beneficiary for any blackout period 
        during which the ability of such participant or 
        beneficiary to direct the investment of the assets in 
        his or her account is suspended by a plan sponsor or 
        fiduciary.
  (B) If a person referred to in subparagraph (A)(ii) meets the 
requirements of this title in connection with authorizing and 
implementing the blackout period, any person who is otherwise a 
fiduciary shall not be liable under this title for any loss 
occurring during such period.
  (C) For purposes of this paragraph, the term ``blackout 
period'' has the meaning given such term by section 101(i)(7).
          (2) In the case of a simple retirement account 
        established pursuant to a qualified salary reduction 
        arrangement under section 408(p) of the Internal 
        Revenue Code of 1986, a participant or beneficiary 
        shall, for purposes of paragraph (1), be treated as 
        exercising control over the assets in the account upon 
        the earliest of--
                  (A) an affirmative election among investment 
                options with respect to the initial investment 
                of any contribution,
                  (B) a rollover to any other simple retirement 
                account or individual retirement plan, or
                  (C) one year after the simple retirement 
                account is established.
        No reports, other than those required under section 
        101(g), shall be required with respect to a simple 
        retirement account established pursuant to such a 
        qualified salary reduction arrangement.
          (3) In the case of a pension plan which makes a 
        transfer to an individual retirement account or annuity 
        of a designated trustee or issuer under section 
        401(a)(31)(B) of the Internal Revenue Code of 1986, the 
        participant or beneficiary shall, for purposes of 
        paragraph (1), be treated as exercising control over 
        the assets in the account or annuity upon--
                  (A) the earlier of--
                          (i) a rollover of all or a portion of 
                        the amount to another individual 
                        retirement account or annuity; or
                          (ii) one year after the transfer is 
                        made; or
                  (B) a transfer that is made in a manner 
                consistent with guidance provided by the 
                Secretary.
          (4)(A) In any case in which a qualified change in 
        investment options occurs in connection with an 
        individual account plan, a participant or beneficiary 
        shall not be treated for purposes of paragraph (1) as 
        not exercising control over the assets in his account 
        in connection with such change if the requirements of 
        subparagraph (C) are met in connection with such 
        change.
          (B) For purposes of subparagraph (A), the term 
        ``qualified change in investment options'' means, in 
        connection with an individual account plan, a change in 
        the investment options offered to the participant or 
        beneficiary under the terms of the plan, under which--
                  (i) the account of the participant or 
                beneficiary is reallocated among one or more 
                remaining or new investment options which are 
                offered in lieu of one or more investment 
                options offered immediately prior to the 
                effective date of the change, and
                  (ii) the stated characteristics of the 
                remaining or new investment options provided 
                under clause (i), including characteristics 
                relating to risk and rate of return, are, as of 
                immediately after the change, reasonably 
                similar to those of the existing investment 
                options as of immediately before the change.
          (C) The requirements of this subparagraph are met in 
        connection with a qualified change in investment 
        options if--
                  (i) at least 30 days and no more than 60 days 
                prior to the effective date of the change, the 
                plan administrator furnishes written notice of 
                the change to the participants and 
                beneficiaries, including information comparing 
                the existing and new investment options and an 
                explanation that, in the absence of affirmative 
                investment instructions from the participant or 
                beneficiary to the contrary, the account of the 
                participant or beneficiary will be invested in 
                the manner described in subparagraph (B),
                  (ii) the participant or beneficiary has not 
                provided to the plan administrator, in advance 
                of the effective date of the change, 
                affirmative investment instructions contrary to 
                the change, and
                  (iii) the investments under the plan of the 
                participant or beneficiary as in effect 
                immediately prior to the effective date of the 
                change were the product of the exercise by such 
                participant or beneficiary of control over the 
                assets of the account within the meaning of 
                paragraph (1).
          (5) Default investment arrangements.--
                  (A) In general.--For purposes of paragraph 
                (1), a participant or beneficiary in an 
                individual account plan meeting the notice 
                requirements of subparagraph (B) shall be 
                treated as exercising control over the assets 
                in the account with respect to the amount of 
                contributions and earnings which, in the 
                absence of an investment election by the 
                participant or beneficiary, are invested by the 
                plan in accordance with regulations prescribed 
                by the Secretary. The regulations under this 
                subparagraph shall provide guidance on the 
                appropriateness of designating default 
                investments that include a mix of asset classes 
                consistent with capital preservation or long-
                term capital appreciation, or a blend of both.
                  (B) Notice requirements.--
                          (i) In general.--The requirements of 
                        this subparagraph are met if each 
                        participant or beneficiary--
                                  (I) receives, within a 
                                reasonable period of time 
                                before each plan year, a notice 
                                explaining the employee's right 
                                under the plan to designate how 
                                contributions and earnings will 
                                be invested and explaining how, 
                                in the absence of any 
                                investment election by the 
                                participant or beneficiary, 
                                such contributions and earnings 
                                will be invested, and
                                  (II) has a reasonable period 
                                of time after receipt of such 
                                notice and before the beginning 
                                of the plan year to make such 
                                designation.
                          (ii) Form of notice.--The 
                        requirements of clauses (i) and (ii) of 
                        section 401(k)(12)(D) of the Internal 
                        Revenue Code of 1986 shall apply with 
                        respect to the notices described in 
                        this subparagraph.
          (6) Default investment arrangements for a pension-
        linked emergency savings account.--For purposes of 
        paragraph (1), a participant in a pension-linked 
        emergency savings account shall be treated as 
        exercising control over the assets in the account with 
        respect to the amount of contributions and earnings 
        which are invested in accordance with section 
        801(c)(1)(A)(iii).
  (d)(1) If, in connection with the termination of a pension 
plan which is a single-employer plan, there is an election to 
establish or maintain a qualified replacement plan, or to 
increase benefits, as provided under section 4980(d) of the 
Internal Revenue Code of 1986, a fiduciary shall discharge the 
fiduciary's duties under this title and title IV in accordance 
with the following requirements:
          (A) In the case of a fiduciary of the terminated 
        plan, any requirement--
                  (i) under section 4980(d)(2)(B) of such Code 
                with respect to the transfer of assets from the 
                terminated plan to a qualified replacement 
                plan, and
                  (ii) under section 4980(d)(2)(B)(ii) or 
                4980(d)(3) of such Code with respect to any 
                increase in benefits under the terminated plan.
          (B) In the case of a fiduciary of a qualified 
        replacement plan, any requirement--
                  (i) under section 4980(d)(2)(A) of such Code 
                with respect to participation in the qualified 
                replacement plan of active participants in the 
                terminated plan,
                  (ii) under section 4980(d)(2)(B) of such Code 
                with respect to the receipt of assets from the 
                terminated plan, and
                  (iii) under section 4980(d)(2)(C) of such 
                Code with respect to the allocation of assets 
                to participants of the qualified replacement 
                plan.
  (2) For purposes of this subsection--
          (A) any term used in this subsection which is also 
        used in section 4980(d) of the Internal Revenue Code of 
        1986 shall have the same meaning as when used in such 
        section, and
          (B) any reference in this subsection to the Internal 
        Revenue Code of 1986 shall be a reference to such Code 
        as in effect immediately after the enactment of the 
        Omnibus Budget Reconciliation Act of 1990.
  (e) Safe Harbor for Annuity Selection.--
          (1) In general.--With respect to the selection of an 
        insurer for a guaranteed retirement income contract, 
        the requirements of subsection (a)(1)(B) will be deemed 
        to be satisfied if a fiduciary--
                  (A) engages in an objective, thorough, and 
                analytical search for the purpose of 
                identifying insurers from which to purchase 
                such contracts;
                  (B) with respect to each insurer identified 
                under subparagraph (A)--
                          (i) considers the financial 
                        capability of such insurer to satisfy 
                        its obligations under the guaranteed 
                        retirement income contract; and
                          (ii) considers the cost (including 
                        fees and commissions) of the guaranteed 
                        retirement income contract offered by 
                        the insurer in relation to the benefits 
                        and product features of the contract 
                        and administrative services to be 
                        provided under such contract; and
                  (C) on the basis of such consideration, 
                concludes that--
                          (i) at the time of the selection, the 
                        insurer is financially capable of 
                        satisfying its obligations under the 
                        guaranteed retirement income contract; 
                        and
                          (ii) the relative cost of the 
                        selected guaranteed retirement income 
                        contract as described in subparagraph 
                        (B)(ii) is reasonable.
          (2) Financial capability of the insurer.--A fiduciary 
        will be deemed to satisfy the requirements of 
        paragraphs (1)(B)(i) and (1)(C)(i) if--
                  (A) the fiduciary obtains written 
                representations from the insurer that--
                          (i) the insurer is licensed to offer 
                        guaranteed retirement income contracts;
                          (ii) the insurer, at the time of 
                        selection and for each of the 
                        immediately preceding 7 plan years--
                                  (I) operates under a 
                                certificate of authority from 
                                the insurance commissioner of 
                                its domiciliary State which has 
                                not been revoked or suspended;
                                  (II) has filed audited 
                                financial statements in 
                                accordance with the laws of its 
                                domiciliary State under 
                                applicable statutory accounting 
                                principles;
                                  (III) maintains (and has 
                                maintained) reserves which 
                                satisfies all the statutory 
                                requirements of all States 
                                where the insurer does 
                                business; and
                                  (IV) is not operating under 
                                an order of supervision, 
                                rehabilitation, or liquidation;
                          (iii) the insurer undergoes, at least 
                        every 5 years, a financial examination 
                        (within the meaning of the law of its 
                        domiciliary State) by the insurance 
                        commissioner of the domiciliary State 
                        (or representative, designee, or other 
                        party approved by such commissioner); 
                        and
                          (iv) the insurer will notify the 
                        fiduciary of any change in 
                        circumstances occurring after the 
                        provision of the representations in 
                        clauses (i), (ii), and (iii) which 
                        would preclude the insurer from making 
                        such representations at the time of 
                        issuance of the guaranteed retirement 
                        income contract; and
                  (B) after receiving such representations and 
                as of the time of selection, the fiduciary has 
                not received any notice described in 
                subparagraph (A)(iv) and is in possession of no 
                other information which would cause the 
                fiduciary to question the representations 
                provided.
          (3) No requirement to select lowest cost.--Nothing in 
        this subsection shall be construed to require a 
        fiduciary to select the lowest cost contract. A 
        fiduciary may consider the value of a contract, 
        including features and benefits of the contract and 
        attributes of the insurer (including, without 
        limitation, the insurer's financial strength) in 
        conjunction with the cost of the contract.
          (4) Time of selection.--
                  (A) In general.--For purposes of this 
                subsection, the time of selection is--
                          (i) the time that the insurer and the 
                        contract are selected for distribution 
                        of benefits to a specific participant 
                        or beneficiary; or
                          (ii) if the fiduciary periodically 
                        reviews the continuing appropriateness 
                        of the conclusion described in 
                        paragraph (1)(C) with respect to a 
                        selected insurer, taking into account 
                        the considerations described in such 
                        paragraph, the time that the insurer 
                        and the contract are selected to 
                        provide benefits at future dates to 
                        participants or beneficiaries under the 
                        plan.
                Nothing in the preceding sentence shall be 
                construed to require the fiduciary to review 
                the appropriateness of a selection after the 
                purchase of a contract for a participant or 
                beneficiary.
                  (B) Periodic review.--A fiduciary will be 
                deemed to have conducted the periodic review 
                described in subparagraph (A)(ii) if the 
                fiduciary obtains the written representations 
                described in clauses (i), (ii), and (iii) of 
                paragraph (2)(A) from the insurer on an annual 
                basis, unless the fiduciary receives any notice 
                described in paragraph (2)(A)(iv) or otherwise 
                becomes aware of facts that would cause the 
                fiduciary to question such representations.
          (5) Limited liability.--A fiduciary which satisfies 
        the requirements of this subsection shall not be liable 
        following the distribution of any benefit, or the 
        investment by or on behalf of a participant or 
        beneficiary pursuant to the selected guaranteed 
        retirement income contract, for any losses that may 
        result to the participant or beneficiary due to an 
        insurer's inability to satisfy its financial 
        obligations under the terms of such contract.
          (6) Definitions.--For purposes of this subsection--
                  (A) Insurer.--The term ``insurer'' means an 
                insurance company, insurance service, or 
                insurance organization, including affiliates of 
                such companies.
                  (B) Guaranteed retirement income contract.--
                The term ``guaranteed retirement income 
                contract'' means an annuity contract for a 
                fixed term or a contract (or provision or 
                feature thereof) which provides guaranteed 
                benefits annually (or more frequently) for at 
                least the remainder of the life of the 
                participant or the joint lives of the 
                participant and the participant's designated 
                beneficiary as part of an individual account 
                plan.
  (f) Exercise of Shareholder Rights.--
          (1) Authority to exercise shareholder rights.--
                  (A) In general.--The fiduciary duty to manage 
                plan assets that are shares of stock includes 
                the management of shareholder rights 
                appurtenant to those shares, including the 
                right to vote proxies. When deciding whether to 
                exercise a shareholder right and in exercising 
                such right, including the voting of proxies, a 
                fiduciary must act prudently and solely in the 
                interests of participants and beneficiaries and 
                for the exclusive purpose of providing benefits 
                to participants and beneficiaries and defraying 
                the reasonable expenses of administering the 
                plan. The fiduciary duty to manage shareholder 
                rights appurtenant to shares of stock does not 
                require the voting of every proxy or the 
                exercise of every shareholder right.
                  (B) Exception.--This subsection shall not 
                apply to voting, tender, and similar rights 
                with respect to securities that are passed 
                through pursuant to the terms of an individual 
                account plan to participants and beneficiaries 
                with accounts holding such securities.
          (2) Requirements for exercise of shareholder 
        rights.--A fiduciary, when deciding whether to exercise 
        a shareholder right and when exercising a shareholder 
        right--
                  (A) shall--
                          (i) act solely in accordance with the 
                        economic interest of the plan and its 
                        participants and beneficiaries;
                          (ii) consider any costs involved;
                          (iii) evaluate material facts that 
                        form the basis for any particular proxy 
                        vote or exercise of shareholder rights; 
                        and
                          (iv) maintain a record of any proxy 
                        vote, proxy voting activity, or other 
                        exercise of a shareholder right, 
                        including any attempt to influence 
                        management; and
                  (B) shall not subordinate the interests of 
                participants and beneficiaries in their 
                retirement income or financial benefits under 
                the plan to any non-pecuniary objective, or 
                promote non-pecuniary benefits or goals 
                unrelated to those financial interests of the 
                plan's participants and beneficiaries.
          (3) Monitoring.--A fiduciary shall exercise prudence 
        and diligence in the selection and monitoring of a 
        person, if any, selected to advise or otherwise assist 
        with the exercise of shareholder rights, including by 
        providing research and analysis, recommendations on 
        exercise of proxy voting or other shareholder rights, 
        administrative services with respect to voting proxies, 
        and recordkeeping and reporting services.
          (4) Investment managers and proxy advisory firms.--
        Where the authority to vote proxies or exercise other 
        shareholder rights has been delegated to an investment 
        manager pursuant to section 403(a), or a proxy voting 
        advisory firm or other person who performs advisory 
        services as to the voting of proxies or the exercise of 
        other shareholder rights, a responsible plan fiduciary 
        shall prudently monitor the proxy voting activities of 
        such investment manager or advisory firm and determine 
        whether such activities are in compliance with 
        paragraphs (1) and (2).
          (5) Voting policies.--
                  (A) In general.--In deciding whether to vote 
                a proxy pursuant to this subsection, the plan 
                fiduciary may adopt a proxy voting policy, 
                including a safe harbor proxy voting policy 
                described in subparagraph (B), providing that 
                the authority to vote a proxy shall be 
                exercised pursuant to specific parameters 
                designed to serve the economic interest of the 
                plan.
                  (B) Safe harbor voting policy.--With respect 
                to a decision not to vote a proxy, a fiduciary 
                shall satisfy the fiduciary responsibilities 
                under this subsection if such fiduciary adopts 
                and is following a safe harbor proxy voting 
                policy that--
                          (i) limits voting resources to 
                        particular types of proposals that the 
                        fiduciary has prudently determined are 
                        substantially related to the business 
                        activities of the issuer or are 
                        expected to have a material effect on 
                        the value of the plan investment; or
                          (ii) establishes that the fiduciary 
                        will refrain from voting on proposals 
                        or particular types of proposals when 
                        the assets of a plan invested in the 
                        issuer relative to the total assets of 
                        such plan are below 5 percent (or, in 
                        the event such assets are under 
                        management, when the assets under 
                        management invested in the issuer are 
                        below 5 percent of the total assets 
                        under management).
                  (C) Exception.--No proxy voting policy 
                adopted pursuant to this paragraph shall 
                preclude a fiduciary from submitting a proxy 
                vote when the fiduciary determines that the 
                matter being voted on is expected to have a 
                material economic effect on the investment 
                performance of a plan's portfolio (or the 
                investment performance of assets under 
                management in the case of an investment 
                manager); provided, however, that in all cases 
                compliance with a safe harbor voting policy 
                shall be presumed to satisfy fiduciary 
                responsibilities with respect to decisions not 
                to vote.
          (6) Review.--A fiduciary shall periodically review 
        any policy adopted under this subsection.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              INTRODUCTION

    H.R. 5337, the Retirement Proxy Protection Act, amends the 
Employee Retirement Income Security Act of 1974 (ERISA)\1\ to 
codify a Trump Administration regulation regarding proxy voting 
and shareholder rights.\2\ The Trump-era rule, which lacked a 
sound policy rationale and perpetuated a bias against 
environmental, social, governance (ESG) investing, sought to 
disenfranchise retirement plan fiduciaries from exercising 
their shareholder rights on behalf of workers. H.R. 5338 is 
opposed by organizations such as the AFL-CIO, Americans for 
Financial Reform, and US SIF: The Forum for Sustainable and 
Responsible Investment (US SIF).
---------------------------------------------------------------------------
    \1\29 U.S.C. Sec. 1104.
    \2\Fiduciary Duties Regarding Proxy Voting and Shareholder Rights, 
85 Fed. Reg. 81658, (Dec. 16, 2020), [hereinafter 2020 Final Rule], 
https://www.govinfo.gov/app/details/FR-202012-16/2020-27465.
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  CONTEXT FOR H.R. 5337 AND BACKGROUND ON THE TRUMP ADMINISTRATION'S 
                          FLAWED VIEWS ON ESG

    Retirement savings plans covered by ERISA likely have 
stocks as part of their investment portfolios.\3\ Stock 
ownership provides an investor with certain shareholder rights, 
often including the right to vote on matters of corporate 
governance (e.g., electing the board of directors, executive 
compensation, shareholder proposals on ESG-related issues). 
ERISA pension plans often amass large amounts of stock in 
companies on behalf of workers invested in the plan. There has 
been a long-standing principle under ERISA that appropriate 
management of funds includes fiduciaries exercising shareholder 
rights and voting by proxy for individual investors on these 
corporate governance matters.
---------------------------------------------------------------------------
    \3\See John. J. Topoleski & Elizabeth A. Myers, Cong. Rsch. Serv., 
IF12362, Department of Labor Guidance and Regulations on the Exercise 
of Shareholder Rights by Private-Sector Pension Plans (2023), https://
crsreports.congress.gov/product/details?prodcode=IF12362.
---------------------------------------------------------------------------
    The voting of proxies is not an arbitrary exercise, but 
rather an economically important mechanism for shareholders to 
monitor and hold company management accountable and enhance 
long-term value of plan assets. For example, in the years since 
the scandal at WorldCom, a telecommunications corporation whose 
executives engaged in massive accounting fraud, it has become a 
common understanding that prudent corporate governance 
practices can mitigate the risk such malfeasance goes 
unnoticed. Proxy voting plays a pivotal role in enhancing 
investment returns by improving corporate accountability and 
potentially reducing the risk of wrongdoing.
    Over decades, the Department of Labor (DOL) has 
periodically issued guidance on proxy voting issues yet has 
consistently affirmed that ERISA's fiduciary duties of loyalty 
and prudence apply to proxy voting by pension and employee 
benefit plans.\4\ This is because the exercise of shareholder 
rights is key to ensuring management's accountability to the 
shareholders that own the company, in this case retirement plan 
investors.
---------------------------------------------------------------------------
    \4\See Letter from U.S. Dep't of Lab. to Mr. Helmuth Fandl, Chrmn. 
of the Retirement Board of Avon Products, Inc. (Feb. 23, 1988), 198 WL 
897696 (``In general, the fiduciary act of managing plan assets which 
are shares of corporate stock would include the voting of proxies 
appurtenant to those shares of stock.''). The Department subsequently 
restated this view in 1994 (Interpretive Bulletin 94-2); in 2008 
(Interpretive Bulletin 2008-02); in 2016 (Interpretative Bulletin 2016-
01); and in 2018 (Field Assistance Bulletin 2018-01).
---------------------------------------------------------------------------
    In 2020, the Trump Administration proposed a rule on proxy 
voting that overturned such long-standing guidance. The rule 
was based on a flawed premise that there is a ``persistent 
misunderstanding among stakeholders that ERISA fiduciaries are 
required to vote all proxies.''\5\ BlackRock, the world's 
largest asset manager, submitted a comment letter raising 
concerns with the premise of the Trump-era proxy voting rule, 
among other issues. Specifically, BlackRock noted that 
``fiduciaries do not believe that they are required to vote all 
proxies; rather, they have concluded that under most 
circumstances, voting proxies is in the long-term economic 
interests of plan participants and beneficiaries.''\6\ Many 
other stakeholders agreed. According to the Interfaith Center 
on Corporate Responsibility, which is a broad coalition of 
institutional investors collectively representing over $500 
billion in invested capital, ``[n]o evidence appears . . . 
supporting the notion that fiduciaries are confused about their 
obligations with respect to proxy voting.''\7\
---------------------------------------------------------------------------
    \5\2020 Final Rule, supra note 1, at 55222.
    \6\Comment No. EBSA-2020-0008-0297, at 3, https://
www.regulations.gov/comment/EBSA-2020-0008-0297.
    \7\Comment No. EBSA-2020-0008-0301, at 2, https://
www.regulations.gov/comment/EBSA-2020-0008-0301.
---------------------------------------------------------------------------
    The Trump-era DOL also claimed ``some fiduciaries . . . may 
be acting in ways that unwittingly allow plan assets to be used 
to support or pursue proxy proposals for environmental, social, 
or public policy agendas that have no connection to increasing 
the value of investments . . .''\8\ This claim reflected the 
Trump Administration's assumption that shareholder proposals 
addressing ESG investing by definition do not have an economic 
impact on the value of plan assets. This assumption is 
incorrect. Numerous retirement stakeholders, including publicly 
traded companies, submitted comments to DOL pointing out that 
it is often the case that voting proxies on ESG-related issues 
is in the economic interests of retirement savers. One 
organization explained that ``[c]onsideration of ESG is a well-
developed risk management strategy aimed at integrating factors 
such as climate change and human capital management that 
evidence shows have a material impact on asset prices, 
especially when taking into account the risks that long-term, 
universal investors like pension plans face.''\9\
---------------------------------------------------------------------------
    \8\2020 Final Rule, supra note 1, at 55222.
    \9\Comment No. EBSA-2020-0008-0227, at 2, https://
www.regulations.gov/comment/EBSA-2020-0008-0227.
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           H.R. 5337 CODIFIES A DEEPLY FLAWED TRUMP-ERA RULE

    Notwithstanding many stakeholder concerns and opposition, 
the Trump Administraiton finalized its proxy rule that imposed 
first-of-its-kind restrictions on plan fiduciaries when it came 
to exercising shareholder rights. The Trump-era proxy voting 
rule specified that fiduciaries were not required to vote on 
all proxies and included two safe harbors that permitted 
fiduciaries to limit or refrain from voting in certain 
situations.\10\ The rule also imposed new onerous recordkeeping 
requirements and monitoring obligations regarding the exercise 
of shareholder rights.
---------------------------------------------------------------------------
    \10\2020 Final Rule, supra note 1.
---------------------------------------------------------------------------
    Taken together, the requirements of the Trump-era proxy 
voting rule were seen by many as unnecessary and effectively 
disenfranchising ERISA fiduciaries and ultimately reducing the 
rights of retirement plan participants. To that same end, H.R. 
5337 would ``put a thumb on the scale against fiduciaries 
exercising shareholder rights on behalf of workers whose 
deferred wages they are responsible for managing for them, 
which would result in enhancing the power of public companies'' 
management and decreasing the say and power of workers in the 
companies they are invested in.''\11\
---------------------------------------------------------------------------
    \11\See Letter from Americans for Financial Reform to Chair 
Virginia Foxx and Ranking Member Bobby Scott, H. Comm. on Educ. & the 
Workforce, Full Committee Markup, (Sept. 13, 2023), at 4, https://
ourfinancialsecurity.org/wp-content/uploads/2023/09/9.13.23-
CorporateGovernance-Letter-of-Opposition-to-Anti-ESG-Bills.pdf.
---------------------------------------------------------------------------
    Had Committee Republicans held a legislative hearing on 
H.R. 5337, Committee Members could have heard testimony and 
asked witnesses' questions about the bill's deterrent effect on 
fiduciaries' exercising their shareholder rights. 
Unfortunately, Committee Republicans failed to hold a 
legislative hearing on H.R. 5337 and instead hastily marked up 
the bill shortly after it was introduced.

        DEMOCRATIC AMENDMENT OFFERED DURING MARKUP OF H.R. 5337

    Committee Democrats put forward one substitute amendment to 
improve the bill. Offered by Ranking Member Scott (D-VA-3), 
this amendment would have codified the Biden Administration's 
proxy voting rule.

----------------------------------------------------------------------------------------------------------------
              Amendment                       Offered by              Description              Action taken
----------------------------------------------------------------------------------------------------------------
#2...................................  Mr. Scott..............  Codifies the Biden       Defeated
                                                                 Administration's final
                                                                 proxy voting rule.
----------------------------------------------------------------------------------------------------------------

    Finalized in 2022, the Biden rule replaced the Trump-era 
rule and codified DOL's previously long-held view that a 
fiduciary's responsibilities include voting proxies. The rule 
also corrected several objectionable provisions of the Trump-
era rule. For instance, it eliminated the language from the 
Trump-era rule stating that fiduciaries are not required to 
vote all proxies.\12\ It also eliminated the Trump-era rule's 
safe harbors permitting fiduciaries to limit or refrain from 
voting proxies in certain situations.\13\ The rule also put an 
end to Trump-era rule's recordkeeping requirements and 
monitoring obligations on proxy voting activities.\14\
---------------------------------------------------------------------------
    \12\``Prudence and Loyalty in Selecting Plan Investments and 
Exercising Shareholder Rights,'' 87 Fed. Reg. 73822-73886, (Dec. 1, 
2022), https://www.govinfo.gov/content/pkg/FR-2022-12-01/pdf/2022-
25783.pdf.
    \13\ Id. at 73849.
    \14\ Id. at 73845.
---------------------------------------------------------------------------
    Additionally, unlike the Trump-era rule, the Biden 
Administration's rule (which addressed both proxy voting and 
ESG investing generally) was popular and supported by 
individuals and stakeholder groups. US SIF and other 
organizations conducted an analysis of the comments submitted 
to DOL on the Biden Administration's proposed ESG and proxy 
voting rule. Of the over 22,000 comments submitted by 
individuals, 97.4 percent were in support of the proposed 
rule.\15\ And of the 144 letters submitted by institutions--
such as corporations, asset managers, financial firms, trade 
groups, and labor organizations--83 percent were supportive, 
with some recommending modifications.\16\ The amendment to 
codify this rule failed on a party line vote.
---------------------------------------------------------------------------
    \15\Eric Pitt, Ceres Accelerator for Sustainable Capital Markets, 
Bryan McGannon and Ginny Brooks, US SIF: The Forum for Sustainable and 
Responsible Investment, Garbriel Malek, Stephanie Jones, and Clare 
Staib-Kaufman, Environmental Defense Fund, Public comments 
overwhelmingly support the US Labor Department proposed rule addressing 
the inclusion of ESG criteria and proxy voting in ERISA-governed 
retirement plans, (Jan. 25, 2022), https://www.ussif.org/Files/
Public_Policy/DOL_Comment_Analysis_1.25.22.pdf.
    \16\ Id. at 3.
---------------------------------------------------------------------------

                               CONCLUSION

    H.R. 5337 would codify an unnecessary, unpopular, and 
unreasonable Trump-era rule that curtailed the ability of plan 
fiduciaries to vote on proxies to the detriment of retirement 
savers. For the reasons stated above, Committee Democrats 
opposed H.R. 5337 when the Committee on Education and the 
Workforce considered it on September 14, 2023. We urge the 
House of Representatives to do the same.

                                   Robert C. ``Bobby'' Scott,
                                           Ranking Member.
                                   Mark DeSaulnier.
                                   Gregorio Kilili Camacho Sablan.
                                   Jahana Hayes.
                                   Haley M. Stevens.

                                  [all]