DOL/EBSA has followed up its outrageously unsupportable proposed rule on ESG investing (more than 95 percent of the more than 7000 comments strongly opposed) with an even more outrageously unsupportable proposed rule rolling back more than 30 years of settled law that all aspects of share ownership — the right to trade, to sue, and the right to vote a proxy or file a shareholder proposal — must be subject to the same “exclusive benefit of plan participant” fiduciary standard. This proposal fails in every category: legal and economic. We will be filing a comment, which will be published here in full. Stay tuned.

The Department of Labor proposed a rule Monday that would require ERISA-governed fiduciaries to cast proxy votes only when they would have an economic impact on the retirement plan.

The proposed rule, which will have a 30-day comment period, would ensure that ERISA plan fiduciaries “keep their eyes properly focused on the interests of ERISA plan participants,” a senior Labor Department official said on a call with reporters.

The proposal includes provisions that articulate general duties requiring fiduciaries to vote any proxy where the fiduciary “prudently determines that the matter being voted upon would have an economic impact on the plan,” the Labor Department said in a news release. Moreover, the rule would prohibit fiduciaries from voting any proxy unless the fiduciary “prudently determines that the matter has an economic impact on the plan.” In its proposal, the Labor Department outlined permitted practices under which a plan fiduciary can adopt certain proxy voting policies and parameters reasonably designed to serve the plan’s economic interest. “The proposed proxy rule would ensure that individuals responsible for the retirement savings of millions of American workers are voting proxies only where it is financially in the interest of the plan to do so,” Secretary of Labor Eugene Scalia said in the news release. “The proposal would provide clarity and further the prudent management of plan assets and resources.”

DOL proposes rule to narrow scope of ERISA fiduciaries’ proxy voting