PARSA
- Bill Number
- S. 928
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-03-11: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2025-12-10T07:09:20Z
AI-Generated Summary
Purpose
The Protecting Americans' Retirement Savings Act (PARSA), or S. 928, aims to safeguard employee retirement savings by amending the Employee Retirement Income Security Act of 1974 (ERISA). It prohibits new investments by retirement plans in entities from foreign adversaries (such as China) or those subject to U.S. sanctions, while requiring detailed disclosures about any existing such investments. This is intended to protect plan participants from financial risks tied to national security threats.
Key Provisions
- Prohibition on New Investments: Fiduciaries (those responsible for managing retirement plans) cannot allow plans to acquire ownership interests, lend money, provide goods/services, or transfer assets/data to "covered entities." These include:
- Foreign adversary entities: Government bodies, armed forces, political parties, or businesses in countries like China (including its special regions) that are under their control.
- Sanctioned entities: Companies or organizations on U.S. government lists related to military, export controls, forced labor, or security risks (e.g., the Non-SDN Chinese Military-Industrial Complex List, Entity List by the Department of Commerce, or Uyghur Forced Labor Prevention Act Entity List).
- Handling Existing Investments: Plans can continue holding pre-enactment investments in covered entities if fiduciaries meet enhanced disclosure rules (detailed below). Similarly, binding agreements made before enactment can be honored until they expire or can be terminated, with disclosures.
- Disclosure Requirements: Annual plan descriptions must include:
- Aggregate value and details of assets tied to sanctioned entities (e.g., identities and reasons for listing).
- Specific details on foreign adversary entity investments (e.g., value, investment vehicle, responsible fiduciary, and rationale for keeping them).
- Information on any ongoing pre-enactment agreements (e.g., assets involved, expiration dates).
- Definitions and Implementation:
- Interest: Broadly covers direct/indirect ownership, derivatives, or contracts mimicking returns from covered entities.
- Fiduciary: Expanded to include anyone controlling participant data.
- The Secretary of Labor must issue implementing regulations within 180 days of enactment, effective no later than 1 year after.
Significant Changes to Existing Law
- Adds a new subsection to ERISA Section 404(a), making investments in covered entities a direct violation of fiduciary duties (which previously focused on prudence and diversification without specific foreign restrictions).
- Expands ERISA Section 103(b)(3) to mandate disclosures about sanctioned and foreign adversary investments, building on existing reporting but adding entity-specific details and national security-focused lists.
- Introduces a new Section 103(h) with definitions for key terms like "foreign adversary," "sanctioned entity," and "interest," drawing from existing U.S. laws (e.g., defense authorizations, export regulations) but applying them uniquely to retirement plans.
Potential Impacts
- On Government Agencies: The Department of Labor gains enforcement responsibilities through new regulations. Agencies like the Treasury, Commerce, Defense, and Customs and Border Protection will indirectly influence the law via their sanction lists, potentially increasing administrative workload to update and maintain them.
- On Citizens: Retirement plan participants (millions of American workers) may see reduced exposure to volatile or risky foreign investments, potentially stabilizing savings but possibly lowering returns if diversified options shrink. Existing investors face disclosure burdens but no forced divestment.
- On International Relations: Restricts U.S. capital flows to adversaries like China, which could escalate economic tensions or support U.S. efforts to counter foreign influence, but might provoke retaliation affecting global markets.
Main Stakeholders Affected
- Retirement Plan Fiduciaries and Administrators: Bear primary compliance burden, including avoiding prohibited transactions and preparing detailed disclosures; face potential liability for violations.
- Plan Participants and Beneficiaries: Workers and retirees whose savings are protected from certain foreign risks, though they may experience indirect effects on investment performance.
- Foreign Entities: Companies or governments on U.S. sanction lists (especially Chinese military-linked firms) lose access to U.S. retirement funds, impacting their funding.
- U.S. Government Agencies: Departments managing sanction lists (e.g., Treasury's Office of Foreign Assets Control, Commerce's Bureau of Industry and Security) and the Labor Department for oversight.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens ERISA's fiduciary standards by tying them to national security, potentially leading to more lawsuits if fiduciaries fail to divest or disclose properly. The broad definition of "interest" could complicate compliance for indirect holdings like mutual funds.
- Constitutional: May raise property rights concerns under the Fifth Amendment for existing investments (e.g., if disclosures lead to indirect pressure to sell), but the law mitigates this by allowing continuations without forced sales. No direct free speech issues, as disclosures are factual.
- Political: Reflects bipartisan concerns over foreign adversaries' economic influence, particularly China's role in U.S. supply chains and military tech. It aligns with broader policies like export controls and forced labor bans, but could face debate over limiting fiduciary discretion or economic isolationism.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-03-11: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-03-11: Introduced in Senate
Bill Versions
- Protecting Americans’ Retirement Savings Act — issued 2025-03-11 — PDF (10 pages)