CRS Reviews DOL Guidance on Pension Plan Shareholder Rights
The Congressional Research Service ("CRS") reviewed the Department of Labor’s ("DOL") guidance and regulations concerning the exercise of shareholder rights by private sector pension plans under ERISA.
In an "In Focus" Report, the CRS explained that pension plan fiduciaries are obligated to manage plan assets—including shares of corporate stock—solely for the benefit of participants and beneficiaries. The CRS added that this duty extends to voting proxies and exercising other shareholder rights. Over the years, DOL guidance evolved regarding whether fiduciaries must vote on every proposal and how they should evaluate the economic benefits of voting versus the associated costs.
The CRS detailed the regulatory shifts between administrations. It noted that a 2020 rule under the first Trump Administration emphasized that fiduciaries were not required to vote all proxies and must not subordinate economic interests to non-pecuniary goals. This rule was subsequently replaced by a 2022 Biden Administration rule, which removed safe harbors for not voting and eliminated specific recordkeeping requirements for proxy activities, aiming to encourage engagement in economically relevant shareholder activities.
The CRS said that the 2022 rule faced legal challenges and a Congressional Review Act resolution, though it was ultimately upheld by a federal judge in early 2025. The report highlighted that the second Trump Administration directed the DOL in December 2025 to revise regulations regarding the fiduciary status of proxy advisors and the management of shareholder rights.
The CRS outlined pending legislation in the 119th Congress, such as the Protecting Prudent Investment of Retirement Savings Act and the Retirement Proxy Protection Act. These bills would amend ERISA to codify proxy voting as a fiduciary duty while clarifying that voting every proxy is not mandatory. The proposed legislation would also require fiduciaries to act solely in the economic interest of the plan, maintain records of voting activities, and rigorously monitor proxy advisory firms to ensure compliance with fiduciary standards.