Labor Department headquarters in Washington. (Photo: Mike Scarcella/ALM)
The Department of Labor is preparing to issue regulations on proxy voting by retirement plans that will likely resemble the requirements proposed by the SEC.
The Office of Management and Budget's Office of Information and Regulatory Affairs recently published a "Proxy Voting Update" notice about a "deregulatory action" by the DOL to "modernize fiduciary practices related to the voting rights associated with ERISA plan investments and harmonize those regulations with the requirements of other regulators." The OMB office reviews significant regulatory actions before they are officially proposed and subject to public review.
Marcia Wagner, founder of the Wagner Law Group, which specializes in ERISA and other labor law issues, said she was a bit surprised by the DOL announcement given that the agency had addressed proxy voting policies and 2015 and 2016 interpretive bulletins but understood that the announcement related to regulations proposed since then by the SEC.
The latest SEC proposal, issued in November, includes stricter requirements for shareholders to submit and resubmit proxy proposals, which are common, and requires that proxy advisors thoroughly disclose potential conflicts of interest and allow companies to review proxy voting advice before it's issued.
