Ensuring Sound Guidance Act
This bill generally requires investment advisors and fiduciaries of employer-sponsored retirement plans to make investment decisions based only on pecuniary factors (i.e., factors that a fiduciary prudently determines are expected to have a material effect on the risk and return of an investment based on appropriate investment horizons consistent with the plan's policies and objectives).
The bill allows nonpecuniary factors to be considered in certain situations, such as when a customer specifically requests that these factors be considered or when selecting investment options for certain participant-directed retirement plans.
To amend the Investment Advisers Act of 1940 and the Employment 
 Retirement Income Security Act of 1974 to specify that only pecuniary 
factors are to be taken into account in determining best interest, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ensuring Sound Guidance Act''.

SEC. 2. INVESTMENT ADVISORS ACT OF 1940 AMENDMENT.

    (a) In General.--Section 211(g) of the Investment Advisers Act of 
1940 (15 U.S.C. 80b-11(g)) is amended by adding at the end the 
following:
            ``(3) Best interest based on pecuniary factors.--For 
        purposes of paragraph (1), the best interest of a customer 
        shall be determined using only pecuniary factors, unless the 
        customer specifically requests that non-pecuniary factors be 
        considered.''.
    (b) Rulemaking.--Not later than the end of the 12-month period 
beginning on the date of enactment of this Act, the Securities and 
Exchange Commission shall revise or issue such rules as may be 
necessary to implement the amendment made by subsection (a).

SEC. 3. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 AMENDMENT.

    Section 404(a) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1104(a)) is amended by adding at the end the following:
            ``(3) Interest based on pecuniary factors.--
                    ``(A) In general.--For purposes of paragraph (1), a 
                fiduciary of a plan shall be considered to act solely 
                in the interest of the participants and beneficiaries 
                of the plan with respect to a plan investment or 
                investment course of action only if the fiduciary's 
                action with respect to such investment is based only on 
                pecuniary factors. The fiduciary 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 
                to promote non-pecuniary benefits or goals. The weight 
                given to any pecuniary factor by a fiduciary should 
                appropriately reflect a prudent assessment of the 
                impact of such factor on risk-return.
                    ``(B) Investment alternatives for participant-
                directed individual account plans.--In selecting 
                investment options for a pension plan described in 
                subsection (c)(1)(A), a fiduciary is not prohibited 
                from considering or including an investment option on 
                the basis that such investment option promotes non-
                pecuniary benefits or goals, provided that the 
                fiduciary--
                            ``(i) satisfies the requirements of 
                        paragraph (1) and subparagraph (A) in 
                        considering or including any such investment 
                        option; and
                            ``(ii) does not consider or include such 
                        investment option as a default investment (as 
                        defined in the regulations issued by the 
                        Secretary under subsection (c)(5)(A)), or a 
                        component thereof.
                    ``(C) Pecuniary factor defined.--For the purposes 
                of this paragraph, the term `pecuniary factor' means a 
                factor that a fiduciary prudently determines is 
                expected to have a material effect on the risk and 
                return of an investment based on appropriate investment 
                horizons consistent with the plan's investment 
                objectives and the funding policy established pursuant 
                to section 402(b)(1).''.

SEC. 4. PROHIBITION OF RULE RELATED TO FIDUCIARY PRUDENCE AND LOYALTY.

    The Secretary of Labor may not finalize, implement, administer, or 
enforce the proposed rule entitled ``Prudence and Loyalty in Selecting 
Plan Investments and Exercising Shareholder Rights'' (86 Fed. Reg. 
57272) and dated October 14, 2021.
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Ensuring Sound Guidance Act
To amend the Investment Advisers Act of 1940 and the Employment Retirement Income Security Act of 1974 to specify that only pecuniary factors are to be taken into account in determining best interest, and for other purposes.
Ensuring Sound Guidance Act
Rep. Barr, Andy