Sunday, December 20, 2020

Compliance with the DOL's New Proxy Rules May Stump ERISA Fiduciaries

A counter-revolution in ESG Investing?

Author: David Schwartz

On Friday, December 11, the Department of Labor (DOL) issued its final rules on proxy voting by ERISA fiduciaries. As proposed last August 30, the draft rules drew hundreds of responses by the ESG-directed investing community, many of which criticized as unworkable the DOL proposal. The final version of the rules eliminates the need for plan sponsors to weigh the economic vs. non-economic effects before casting their proxy votes. Yet that softer, principles-based approach may itself create compliance problems for ERISA fiduciaries -- and may not even survive the first hundred days of the Biden administration.

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Friday, May 22, 2015

Supreme Court Rules ERISA Fiduciaries have Continuing Duty to Monitor

Author: David Schwartz

In a unanimous opinion issued on May 18, 2015, the Supreme Court confirmed a continuing duty of ERISA trustees to monitor investments. Although the case involved a complicated procedural history before arriving at the Supreme Court, the lawsuit presented a fairly simple question: is it sufficient for the ERISA duty of prudence that the fiduciary make prudent decisions to invest in the first instance, or must the fiduciary also make prudent ongoing decisions about whether it should change the composition of the plan’s portfolio or otherwise sell assets?  

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Tuesday, March 3, 2015

Revised Fiduciary Standards Slowed but Not Stopped

Author: David Schwartz
Pursuant to a mandate in the Dodd-Frank act, both the Department of Labor and the Securities and Exchange Commission have been working to develop uniform fiduciary standards for investment advisers and broker-dealers.  The efforts of the DOL and SEC have unfolded over the past five years with both floating proposals that have been met with stiff opposition from industry and in Congress.  Each effort has hit its own respective roadblocks over the past year.  However, despite eleventh-hour efforts by members of the investment industry and some on Capitol Hill, both the DOL and SEC appear to be moving ahead with their respective uniform fiduciary standards.
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