Restoring Integrity in Fiduciary Duty Act

Key Points

• This bill changes how retirement plan managers (fiduciaries) choose investments for plans like 401(k)s. It requires them to base decisions only on financial factors that affect risk and return, and bars them from prioritizing social, environmental, or political goals.
• When two investments look financially identical, the manager cannot pick one based on a social cause. Instead, they must choose at random using a "capita aut navia" standard, and they must document why financial factors alone were not enough to make the call.
• Investments that promote social or environmental goals can still be offered in participant-directed plans, but only if they meet the same financial standards as other options and are never used as a default investment option.
• The bill also restricts how fiduciaries vote on shareholder proposals at companies held in retirement plans. Proxy votes must serve only the economic interest of the plan and cannot be used to push nonfinancial objectives like political or ideological causes.
• Fiduciaries must keep records of all proxy votes and monitor any outside advisory firms they hire. A safe harbor policy lets managers skip voting on proposals when the plan holds less than 5% of its assets in a given company.
• The investment rules take effect one year after the bill becomes law, while the shareholder voting rules are set to begin on January 1, 2026.