Fiduciary Duties Regarding
Proxy Voting and Shareholder Rights
New
collection (Request for a new OMB Control Number)
No
Regular
12/16/2020
Requested
Previously Approved
36 Months From Approved
63,911
0
0
0
6,050,762
0
Title I of the Employee Retirement
Income Security Act of 1974 (ERISA) establishes minimum standards
for the operation of private-sector employee benefit plans and
includes fiduciary responsibility rules governing the conduct of
plan fiduciaries. In connection with proxy voting, the Department’s
longstanding position is that the fiduciary act of managing plan
assets includes the management of voting rights (as well as other
shareholder rights) appurtenant to shares of stock, and that
fiduciaries must carry out their duties relating to the voting of
proxies prudently and solely for the economic benefit of plan
participants and beneficiaries. The Department is concerned that
responsible plan fiduciaries, in their efforts to decide whether or
how to vote plan shares—and where applicable, to vote them—and
exercise other shareholder rights, may sometimes impose on plans
costs that exceed the consequent economic benefits to the plans.
Moreover, the Department has reason to believe that responsible
fiduciaries may sometimes rely on third-party advice without taking
sufficient steps to ensure that the advice is impartial and
rigorous, and thereby risk failing to satisfy ERISA’s standards of
fiduciary care and loyalty in exercising plans’ shareholder rights.
Both of these concerns point to the risk that a plan’s proxy voting
activity sometimes will impair rather than advance participants’
economic interest in their benefits. This rule aims to ensure that
the costs plans incur to vote proxies and exercise other
shareholder rights are economically justified and that responsible
fiduciaries’ use of third-party advice supports rather than
jeopardizes their adherence to ERISA’s fiduciary requirements. It
has long been the view of the Department that compliance with a
fiduciary’s investment duties often includes having a written
statement of investment policy, and the duty to monitor
necessitates proper documentation of the activities that are
subject to monitoring. The Department is now including these
requirements in the regulation. The rule requires that plan
fiduciaries maintain a statement of investment policy designed to
further the financial purposes of the plan. The term “investment
policy statement” means a written statement that provides the
fiduciaries who are responsible for plan investments with
guidelines or general instructions concerning various types or
categories of investment management decisions, which should include
proxy voting decisions.
US Code:
29
USC 1104 Name of Law: Employee Retirement Income Security Act
of 1974
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
Proxy Final Rule Supporting Statement 12162020.docx
29 U.S. Code § 1104 - Fiduciary duties.pdf
Fiduciary Duties Regarding Proxy Voting and Shareholder Rights