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Financial Factors in Selecting Plan Investments Under ERISA | Groom Law Group, Chartered


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On November 13, 2020, the Department of Labor (the “Department” or the “DOL”) issued its final regulation entitled
Financial Factors in Selecting Plan Investments (the “Final Regulation” or the “Final Rule”). The purpose of the Final Regulation was, for the first time, to establish by regulation how fiduciaries of plans or accounts covered by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), can comply with ERISA’s fiduciary duty provisions when making investment decisions or recommendations that take into account economic, social or governance (“ESG”) factors. To that end, the Department promulgated a regulation that requires plan fiduciaries to only consider “pecuniary factors” when making fiduciary investment decisions and fiduciary investment recommendations except in very limited circumstances. ....

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DOL Issues Final Proxy Voting Rule | Groom Law Group, Chartered


On December 16, the Department of Labor (the “Department”) published its
final regulation addressing the fiduciary duties that apply to proxy voting and the exercise of other shareholder rights in connection with investments held by ERISA-covered plans. 29 CFR §2550.404a-1(e); 85 Fed. Reg. 81658 (Dec. 16, 2020) (the “Final Rule”) (attached). The Final Rule represents several significant changes to the Department’s proposed proxy voting regulation, issued just over three months ago (the “Proposed Rule”). 85 Fed. Reg. 55219 (Sept. 4, 2020). The Department received over 300 written comment letters as well as 6,700 form letter submissions in response to the Proposed Rule.
The Final Rule reiterates the Department’s long-held view that when voting (or not voting) proxies, plan fiduciaries must consider the economic significance of the issue on the plan’s investment. But it explicitly rejects the broader set of considerations that it had previously articulated ....

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