This briefing provides an update for signatories on legislative and regulatory proposals under discussion in the US regarding the shareholder voting process, ESG integration and the role of proxy advisory firms.
Opponents to such legislative and regulatory efforts include the Council of Institutional Investors, the Consumer Federation of America, and public sector pension fund managers.
In May, the Main Street Investors Coalition was created to lead advocacy efforts to weaken the influence of institutional investors
Untangling the chain of stakeholder interests and incentives requires connecting the business objectives of plan sponsors with the growing demand for ESG incorporation by plan beneficiaries, while working within the fiduciary duty requirements of ERISA.
The ERISA retirement system brings together distinct stakeholders with diverse incentives and objectives. These range from the plan sponsors to pension consultants to the investment managers, independent advice providers and, ultimately, the plan beneficiaries.
Unlike public pension plans, private-sector retirement plans (including both DC and DB plans) must maintain compliance with ERISA regulations, specifically the fiduciary requirements, when selecting investment options.