Sec. 3. Proxy voting guidelines for single employer plans
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Section 402 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1102 ) is amended by adding at the end the following: The trustees of a plan shall establish a set of proxy voting guidelines to direct the voting of the plan's shares of corporate stock by plan fiduciaries, except in the case of an employee stock ownership plan as defined in section 407(d)(6). Each plan trustee described in paragraph
(1)shall undergo training, which shall— include education on proxy voting issues, fund and executive compensation practices, procedural prudence, and appropriate long-term investing for retirement savers; and be administered by a third party nonprofit organization with significant experience in educating trustees for service as employee representatives on employee benefit boards. The training described in subparagraph
(A)shall follow a curriculum established by an entity selected by the Secretary. A failure to undergo training and fulfill the obligation to develop guidelines in accordance with paragraph
(1)shall be deemed to be a violation of fiduciary duties under section 404. A plan may establish multiple voting guidelines, with each set of voting guidelines applicable to specific fiduciaries and investment options available to the plan participants. The voting guidelines established pursuant to this subsection with respect to a plan shall be made available to all plan participants and beneficiaries. If an employee benefit plan is invested in securities issued by an investment company registered under the Investment Company Act of 1940 ( 15 U.S.C. 80a–1 ), or any other pooled investment vehicle, the trustees described in paragraph
(1)shall provide to the company the voting guidelines established under paragraph (1). An investment company or pooled investment vehicle described in subparagraph
(A)shall vote in accordance with the guidelines provided under that subparagraph with respect to the percentage of proxies that is equivalent to the percentage of ownership of the employee benefit plan in the investment company. An investment company described in subparagraph
(A)shall annually provide to the participant representation board a report on all the votes the investment company cast on behalf of the plan in the last year. Each such report shall provide the relevant provision of the plan’s guidelines illustrating how the investment company made its determination. Nothing in this paragraph may be construed to deem securities issued by investment companies to employee benefit plans to be senior securities, as defined in section 18(g) of the Investment Company Act of 1940 ( 15 U.S.C. 80–18(g) ). The Secretary may exempt from the requirements of this subsection any plan with fewer than 100 participants, subject to the same requirements with respect to an exemption to reporting requirements under section 2520.104–46 of title 29, Code of Federal Regulations (or any successor regulations). Not later than one year after the enactment of this subsection, the Secretary shall promulgate rules to ensure that the requirements of this subsection apply to multiple employer plans with pooled providers plans as described in section 413(e) of the Internal Revenue Code of 1986. No investment manager shall require participating investors to accept the investment manager’s own proxy voting policy as a condition of investment . Section 404(a)(1) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104(a)(1) ) is amended— in subparagraph (C), by striking and at the end; in subparagraph (D), by striking the period and inserting ; and ; and by adding at the end the following: in exercising a plan’s proxy voting rights with respect to plan assets— may vote proxies in accordance with the plan's proxy voting guidelines as established by the plan's trustees, unless the fiduciary determines that the casting of any proxy vote would be inconsistent with subparagraphs
(A)and (B); and may consider— the distinct and specific investment objectives and horizons of the participants and beneficiaries, especially in contrast with other market actors engaged in proxy voting; and the diversified nature of the plan’s investments and the effect of any negative externalities generated by portfolio companies on the plan’s ability to provide benefits to participants and beneficiaries by reducing the returns from other plan assets. .
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- 15 USC 80a–1
- 15 USC 80–18(g)
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Sec. 3
Proxy voting guidelines for single employer plans
Cite15 USC 80a–1
Cite15 USC 80–18(g)
Cites 4Cited by 0 across 0 sources