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Criticism of current proxy voting policy – the Republican House Financial Services Committee Working Group
Republican members of the House Committee on Financial Services have formed an ESG Working Group. On June 23, 2023, they published a memorandum on “Key Priorities.” Coming from the Financial Services Committee, the Working Group’s focus is on Securities and Exchange Commission regulatory activity, particularly with respect to proxies. Some of those issues, however, overlap with Department of Labor guidance with respect to proxy voting by retirement plan fiduciaries.
In this article, we first discuss key points of concern identified by the Working Group with respect to proxy voting that implicate issues for retirement plan sponsors. We then review DOL’s position on those issues and how that position has changed from the Trump Administration to the Biden Administration. Our objective is to provide an idea of the issues policymakers will be arguing about in this area, especially if Republicans re-take the Executive Branch.
On July 17, 2023, the Fourth Circuit Court of Appeals upheld a decision for defendant Aon in Reetz v. Aon Hewitt, finding among other things that a “sales pitch” to Lowe’s 401(k) plan fiduciaries of delegated fiduciary services by an Aon sales team did not constitute fiduciary advice. In this article we review the decision.
On June 13, 2023, the Office of Management and Budget released the Administration’s Spring 2023 Regulatory Agenda – a summary of current agency regulation projects. In this article we briefly highlight some of the key projects related to retirement policy.
In this article, we review the Department of Labor’s explanation, in the context of the Federation of Americans for Consumer Choice v. United States Department of Labor litigation, of its view of the status of its advice fiduciary guidance, after a key (perhaps the key) element of that guidance was vacated (declared void) in American Securities Association v. United States Department of Labor. We then briefly discuss a new item on DOL’s Spring 2023 regulatory agenda (released June 13, 2023) – a “rulemaking that would amend the regulatory definition of the term fiduciary … to more appropriately define when persons who render investment advice … are fiduciaries within the meaning of section 3(21) of ERISA and section 4975(e)(3) of the Internal Revenue Code.”