DOL Issues Final Regulations on Proxy Voting and Shareholder Rights

The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued a pre-publication version of final regulations, entitled Fiduciary Duties Regarding Proxy Voting and Shareholder Rights. These regulations were published in the Federal Register in proposed form on September 4, 2020, followed by a 30-day comment period that ended October 5, 2020. Accompanying the final regulations just issued are an EBSA fact sheet and news release.

These final regulations are intended to govern the proxy voting and shareholder rights exercised by fiduciaries of ERISA-governed retirement plans. They amend existing investment duties regulations that have been in place since 1979. The EBSA has stated previously that there have been misunderstandings and confusion surrounding proxy voting and shareholder rights issues, and the guidance now finalized has the goal of ensuring that plan fiduciaries execute their ERISA duties appropriately.

These final regulations will become effective upon publication in the Federal Register, scheduled for December 15.