ERISA Fiduciaries Under a Biden Labor Department: What Is on the Horizon? | Morgan Lewis jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
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On December 11, 2020, the U.S. Department of Labor (“DOL”) announced a final rule establishing a regulatory framework for private employee benefit plans’ fiduciaries to follow when they exercise shareholder rights, including proxy voting, and select and monitor proxy advisory firms.
The DOL stated that the final rule is intended to protect the interests of participants and beneficiaries by: (1) confirming that proxy voting decisions and other exercises of shareholder rights must be solely in the interest of, and for the exclusive purpose of, providing plan benefits to participants and beneficiaries considering the impact of any costs involved; (2) ensuring that plan fiduciaries not subordinate the interests of participants and beneficiaries in their retirement income or financial benefits under the plan to any non-pecuniary objective, or promote non-pecuniary benefits or goals; and (3) improving fiduciary practices
DOL Eases Overly Prescriptive Stance in Final Proxy Voting Rule
It’s unclear how the rule will be interpreted and enforced after the federal administration changes hands, experts say.
The US Department of Labor (DOL) on Friday relaxed its stance on proxy voting and shareholder rights in a final rule, but maintained that private plan fiduciaries should refrain from voting on matters that are not financially material to the plan.
In August, the DOL proposed a rule mandating that plan fiduciaries only participate in proxies that have an economic impact on the plan, after taking costs of exercising shareholder rights into account.