Herein lies the potential for a direct conflict of interest. This applies generally to all proxy voting in commingled portfolios.
Tag "ESG"
Since actively managed funds have lagged index funds, does this case put their continued use in ERISA plans at risk?
On the face of it, American Airlines seemed to follow its documented process. So, what did the company do wrong?
To make the procedure more agonizing, the transition away from Chevron may feel like death by a thousand cuts. But the snail-like process of the courts has its benefits.
The root of these broader fiduciary concerns lies within the domain of compliance. Everything derives from what the regulators require, what any DOL audit might look at, and what might pique the interest of class-action attorneys.
While this might ruffle the feathers of ESG activists, those responsible for the day-to-day work of picking stocks have the real-world experience to fully understand where Buffett is coming from.
The Biden Rule, like the Trump Rule, does not encourage or discourage the use of ESG criteria when selecting investments. This allows fiduciaries to either adopt ESG principles or ignore them.
Unlike previous definitions, this version takes a definitive step towards allowing plan sponsors to forgo traditional financial measures. Rather than relying on extensive academic studies, this new Rule represents a certain leap of faith.
Just as these changes come bearing down, so, too, does a need for greater hand holding. Pressures within the provider industry, however, appear to be reducing the number of available hands.
Summary of 2024: Navigating the Evolved Fiduciary Landscape for Retirement Plan Fiduciaries
2024 was a year of adaptation for retirement plan fiduciaries who navigated through regulatory changes, legal landscapes, and participant needs with a renewed focus on governance, liability management, and the holistic management of retirement plans.