DOL Declares Proxy Advisors as Fiduciaries Under ERISA Guidance
The U.S. Department of Labor's Employee Benefits Security Administration has classified proxy advisory firms as fiduciaries. This change imposes stricter compliance obligations, impacting contractors providing advisory services for ERISA-covered plans.
U.S. Department of Labor, Employee Benefits Security Administration, President of the United States
Key Signals
- DOL clarifies proxy advisors as fiduciaries under ERISA guidance.
- Increased compliance requirements for government procurement in investment advice.
The recent guidance from the U.S. Department of Labor significantly alters the landscape for proxy advisory firms by designating them as fiduciaries under ERISA. This move aims to enhance accountability and compliance within the investment advisory space.
- Procurement professionals should note increased compliance and oversight requirements for proxy advisory services used by government retirement plans.
- Contractors providing proxy advisory or investment advisory services must ensure adherence to fiduciary standards to remain eligible for government contracts.
- This guidance signals heightened regulatory focus on fiduciary responsibilities, potentially affecting contract terms and vendor evaluations involving shareholder voting and investment advice.
- Organizations supporting ERISA-covered plans may need to reassess vendor relationships and contract provisions to align with the new fiduciary expectations.
Agencies
- U.S. Department of Labor
- Employee Benefits Security Administration
- President of the United States
Vendors
- Institutional Shareholder Services
- Glass, Lewis & Co.