S. 1222 — Financial Freedom Act of 2025

This section amends the prudent man standard of care under ERISA section 404(a) (29 U.S.C. 1104(a)) by adding a new paragraph (3) for pension plans that provide individual accounts and permit participant or beneficiary control over account assets. The new provision (1) permits a fiduciary to select or decline to select any particular type of investment alternative—without favoring or disfavoring any type other than on risk-return characteristics—provided the fiduciary offers a broad range of alternatives per Labor Department regulations; and (2) for self-directed brokerage windows, prohibits the Labor Secretary from regulating or restricting offered investments, applies participant control liability protections of subsection (c), and exempts the fiduciary's selection or participant use from diversification and prudence requirements of paragraph (1)(B)-(C). (Thus, plan fiduciaries gain expanded flexibility to offer diverse options, including brokerage windows with unrestricted investments, without ERISA liability for participant-directed choices.)