DOL points the ultimate proxy voting rule for retirement profit plans


The DOL announced on Friday a somewhat toned-down final regulation that includes voting guidelines for retirement benefit trustees. The publication came after heavy criticism from opponents inside and outside the financial services and investment industries.

“The final rule will help retirement plan managers perform their prudent and loyal duties to American workers and retirees as they elect proxy and other shareholder rights,” Labor Secretary Eugene Scalia said in a statement. “The rule reflects changes in response to rule-authoring comments in order to establish appropriately tailored protections for employee benefit plans using a principles-based approach.”


“DOL listened to investors and the public and made significant changes to the proxy proposal that was released on August 31, 2020,” said Lisa Woll, CEO of US SIF, an advocacy group for sustainable and responsible investing.

The intention of the rule according to DOL

The last rule is designed to protect the interests of participants and beneficiaries by:

  • Confirmation that voting rights decisions and other exercise of shareholder rights must be in the interest and solely for the purpose of providing plan benefits for participants and beneficiaries, taking into account the effects of the associated costs.
  • Ensure that the Plan Trustees do not subordinate the interests of participants and beneficiaries in their retirement income or financial performance under the Plan to a non-financial objective or promote non-financial benefits or objectives.
  • Improve fiduciary practices in the selection and monitoring of proxy consulting firms.

“Cost savings and other benefits for plans will accrue to participants and beneficiaries in the form of a more secure retirement income,” claims the DOL.

The division issued this final rule after considering approximately 300 written comments and 6,700 submissions (i.e., forms) as part of two petitions that were received in response to the proposal.

The regulation comes into force 30 days after publication of the regulation in the federal register and applies to the exercise of shareholder rights after this date. The final rule includes late compliance deadlines through January 31, 2022 for certain recording and proxy requirements, subject to the conditions set out in the rule.

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