S. 928 — PARSA

This section prohibits a fiduciary of an employee benefit plan from causing the plan to engage in specified transactions with a covered entity (i.e., a foreign adversary entity or sanctioned entity, as defined in section 103(h)), which constitutes a violation of the prudent man standard of care under ERISA Section 404(a)(1). Prohibited transactions include (1) acquiring an interest in a covered entity, (2) lending money or extending credit to a covered entity, (3) furnishing goods, services, or facilities to a covered entity, and (4) transferring plan assets or participant/beneficiary data to or for the benefit of a covered entity (with fiduciary, for data transfers, including any person with discretionary authority over such data). Plans may continue pre-enactment investments or fulfill pre-enactment binding contracts without violating the prohibition if the fiduciary complies with specified requirements of section 103(b)(3). (As background, ERISA Section 404(a) requires plan fiduciaries to act solely in the interest of participants and beneficiaries with the care, skill, prudence, and diligence of a prudent person.)

This section amends sec. 103(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA; 29 U.S.C. 1023(b)(3)), which specifies required contents of annual reports for ERISA-covered employee benefit plans (i.e., Form 5500 filings), to require new disclosures concerning (1) any plan assets consisting of an interest in a sanctioned entity, including aggregate value, entity identities, and applicable U.S. government sanction lists; (2) any plan assets consisting of an interest in a foreign adversary entity, including aggregate and specific values, investment vehicles, responsible fiduciaries, and factors considered in retaining such investments; and (3) any ongoing agreement subject to ERISA sec. 404(a)(3)(D) (i.e., fiduciary diversification standards), including involved assets, expiration and termination dates, and related details. It adds definitions to ERISA sec. 103, including "sanctioned entity" (entities on lists such as the NS-CMIC List, Entity List, Denied Persons List, and others maintained by Treasury, Defense, Commerce, FCC, and Customs and Border Protection) and "foreign adversary entity" (e.g., governmental bodies, armed forces, political parties, or controlled entities of a "foreign adversary," defined by reference to 10 U.S.C. 4872(d) covered nations such as China). The Secretary of Labor must issue implementing regulations within 180 days of enactment, effective no later than one year after enactment.