H.R. 2067 — PARSA

This section amends the prudent man standard of care for ERISA plan fiduciaries (29 U.S.C. 1104(a)) by prohibiting a fiduciary from causing the plan to conduct any transaction the fiduciary knows or should know will result in (1) acquiring an interest (as defined in section 103(h)) with a covered entity; (2) lending money or extending credit to a covered entity; (3) furnishing goods, services, or facilities to a covered entity; or (4) transferring plan assets or participant/beneficiary data to or for the benefit of a covered entity. A covered entity is a foreign adversary entity or sanctioned entity, as defined in section 103(h); for data transfers, fiduciary includes any person with discretionary authority or control over such data. Existing plan investments in covered entities on the date of enactment may continue, and pre-enactment binding agreements may be fulfilled until expiration or termination, if the fiduciary complies with specified requirements of section 103(b)(3). (ERISA governs private-sector pension and health plans covering over 150 million participants.)

This section amends sec. 103(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA) to require additional disclosures in annual reports (i.e., Form 5500 filings) regarding plan assets, specifically: (1) for assets consisting of an interest in a sanctioned entity (i.e., entities on lists such as the Non-SDN Chinese Military-Industrial Complex List, Commerce Entity List, and Uyghur Forced Labor Prevention Act Entity List), the aggregate value, entity identities, applicable lists, and sanction reasons; (2) for assets consisting of an interest in a foreign adversary entity (i.e., governmental bodies, armed forces, political parties, or controlled entities of covered nations such as China including Hong Kong, Russia, Iran, North Korea, Cuba, and Venezuela), the specific interest and value, investment vehicle, responsible fiduciary, and factors considered in maintaining the investment; and (3) descriptions of ongoing agreements exempt from ERISA prohibited transaction rules under sec. 404(a)(3)(D), including involved assets, expiration and termination dates, and other details specified by the Secretary of Labor. It adds definitions to ERISA sec. 103(h), including "sanctioned entity," "foreign adversary," "foreign adversary entity," and "interest" (i.e., direct, indirect, derivative, or replicating holdings). The Secretary of Labor must issue implementing regulations within 180 days of enactment, to take effect no later than one year after enactment.