New ERISA Proxy-Voting Guidance From The DOL

On August 31, 2020, the Department of Labor (DOL) closed its active summer by issuing proposed rules for plan fiduciaries with respect to voting proxies on behalf of a retirement plan. The DOL's explanation of the reason for the proxy rules dovetails with the rationale behind its recent proposed rules on environmental, social, and governance (ESG) investments. The DOL is emphasizing that fiduciaries must limit their focus to economic issues facing the plan. The proposed rules, however, may require plan fiduciaries to expend significant effort to determine whether they must or must not cast a proxy vote, undermining the goal of providing "clear guideposts." If the proposed rules are finalized, plan fiduciaries will likely need to make changes to their proxy procedures.