Fiduciary Duties Regarding Proxy Voting and Shareholder Rights

Forms and Documents

Document	Type	Status	Availability
Proxy Final Rule Supporting Statement 12162020.docx	Supporting Statement A	Uploaded 2020-12-16	Available
29 U.S. Code § 1104 - Fiduciary duties.pdf	Supplementary Document	Uploaded 2020-12-16	Repair queued

IC Document Collections

IC ID	Collection	Type	Status	Form
241153	Fiduciary Duties Regarding Proxy Voting and Shareholder Rights		Modified

ICR Details

OMB Control No: 1210-0165	ICR Reference No: 202010-1210-002
Status: Received in OIRA	Previous ICR Reference No: 202004-1210-002
Agency/Subagency: DOL/EBSA	Agency Tracking No:
Title: Fiduciary Duties Regarding Proxy Voting and Shareholder Rights
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular	Date Submitted to OIRA: 12/16/2020

	Requested	Previously Approved
Expiration Date	36 Months From Approved
Responses	63,911	0
Time Burden (Hours)	0	0
Cost Burden (Dollars)	6,050,762	0

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Abstract: 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.

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Authorizing Statute(s): US Code: 29 USC 1104 Name of Law: Employee Retirement Income Security Act of 1974
  

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
1210-AB91	Final or interim final rulemaking	85 FR 81658	12/16/2020

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? Yes

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Number of Information Collection (IC) in this ICR: 1

IC Title	Form No.	Form Name
Fiduciary Duties Regarding Proxy Voting and Shareholder Rights

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ICR Summary of Burden

	Total Request	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	63,911	0	0	63,911	0	0
Annual Time Burden (Hours)	0	0	0	0	0	0
Annual Cost Burden (Dollars)	6,050,762	0	0	6,050,762	0	0

Burden increases because of Program Change due to Agency Discretion: No

Burden Increase Due to:

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement:

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Annual Cost to Federal Government: $0

Does this IC contain surveys, censuses, or employ statistical methods? No

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     No

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? No

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Common Form ICR:  No

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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:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(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;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

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.

Certification Date: 12/16/2020

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