PARSA
- Bill Number
- H.R. 2067
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-03-11: Referred to the House Committee on Education and Workforce.
- Last Updated
- 2026-03-06T20:43:46Z
AI-Generated Summary
Purpose of the Legislation
The Protecting Americans' Retirement Savings Act (PARSA), H.R. 2067, aims to safeguard employee retirement savings by restricting investments in entities linked to foreign adversaries (such as China) or subject to U.S. sanctions. It amends the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that sets standards for private pension and health plans, to prevent plans from funding potentially harmful foreign activities while requiring transparency about existing ties.
Key Provisions
- Prohibition on New Investments: Fiduciaries (plan managers responsible for investment decisions) cannot allow retirement plans to acquire ownership stakes, lend money, provide goods or services, or transfer assets or participant data to "covered entities." These include:
- Foreign adversary entities: Government bodies, armed forces, leading political parties, or companies based in, controlled by, or operating under the direction of a foreign adversary (defined as nations like China, including its special administrative regions).
- Sanctioned entities: Companies or organizations listed on U.S. government sanctions lists, such as those related to China's military-industrial complex, export controls, forced labor, or communications security risks (e.g., the Entity List by the Department of Commerce or the Uyghur Forced Labor Prevention Act Entity List).
- Exceptions for Existing Investments:
- Plans holding investments in covered entities as of the law's enactment date can continue them if fiduciaries meet specific compliance rules (referencing ERISA disclosure requirements).
- Plans with pre-enactment binding agreements can fulfill them until expiration or termination, subject to additional compliance.
- Disclosure Requirements: Annual plan reports must include detailed statements on:
- Assets tied to sanctioned entities (e.g., total value, entity identities, and sanction reasons).
- Assets tied to foreign adversary entities (e.g., specific interests, values, investment vehicles, responsible fiduciaries, and rationale for retaining them).
- Details on any ongoing pre-enactment agreements, including involved assets and expiration dates.
- Definitions and Scope:
- Broadly defines "interest" to include direct/indirect ownership, derivatives, or contracts mimicking returns from covered entities.
- Extends fiduciary duties to anyone controlling participant data.
- References existing U.S. regulations for terms like "control" (influence over an entity).
- Implementation Timeline: The Secretary of Labor must issue regulations within 180 days of enactment, effective no later than 1 year after enactment.
Significant Changes to Existing Law
- Adds Fiduciary Restrictions to ERISA Section 404(a): Previously, ERISA required fiduciaries to act prudently in participants' best interests but did not specifically ban investments in foreign adversaries or sanctioned entities. This introduces a direct violation for such transactions, expanding the "prudent person" standard to include national security considerations.
- Enhances ERISA Section 103 Disclosures: Builds on existing annual reporting by mandating new, detailed revelations about risky foreign exposures, including data transfers—previously not required at this level.
- New Definitions in ERISA Section 103(h): Introduces terms like "foreign adversary entity" and "sanctioned entity," tying them to current U.S. sanction frameworks, which allows for automatic updates without new legislation.
Potential Impacts
- On Government Agencies: The Department of Labor gains enforcement responsibilities, including issuing regulations and overseeing compliance. Other agencies (e.g., Treasury, Commerce, Defense) indirectly benefit as their sanction lists trigger the prohibitions, potentially increasing scrutiny of listed entities.
- On Citizens: Retirement plan participants (millions of American workers) may see reduced risk to savings from exposure to geopolitically unstable investments, but could face short-term portfolio adjustments or lower returns if divestment is required. Enhanced disclosures promote transparency, helping individuals make informed choices.
- On International Relations: Strengthens U.S. efforts to limit financial flows to adversaries like China by blocking retirement funds from supporting their military or sanctioned activities. This could escalate economic tensions, signal stricter investment controls, and influence global markets by pressuring companies to divest from listed entities.
Main Stakeholders Affected
- Employee Benefit Plans and Fiduciaries: Pension funds, 401(k) managers, and investment advisors must review and adjust portfolios, ensure compliance, and report disclosures, facing potential liability for violations.
- Retirement Savers: Individual workers and retirees whose savings are held in covered plans, benefiting from protections but possibly affected by investment shifts.
- Foreign Entities: Companies and governments in adversary nations (e.g., Chinese firms on sanction lists) may lose U.S. retirement fund investments, impacting their funding and operations.
- U.S. Regulators and Policymakers: Departments like Labor, Treasury, and Commerce must coordinate on enforcement and list maintenance.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces ERISA's fiduciary duties with enforceable prohibitions, potentially leading to lawsuits if fiduciaries fail to divest or disclose properly. Exceptions for existing investments mitigate abrupt disruptions but require ongoing compliance, which could complicate enforcement.
- Constitutional: May raise questions about property rights if forced divestments are seen as takings without compensation, though grandfathering provisions and focus on fiduciary prudence likely address Fifth Amendment concerns. No direct free speech issues, but data transfer bans could intersect with privacy laws.
- Political: Reflects bipartisan national security priorities, particularly countering China's influence, by leveraging retirement funds as a tool for economic decoupling. Could set precedent for broader restrictions on private investments in geopolitically sensitive areas, influencing future foreign policy debates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Moolenaar, John R. [R-MI-2]
Recent Actions
- 2025-03-11: Referred to the House Committee on Education and Workforce.
- 2025-03-11: Introduced in House
- 2025-03-11: Introduced in House
Bill Versions
- Protecting Americans’ Retirement Savings Act — issued 2025-03-11 — PDF (10 pages)