U.S. Labor Department finalizes limits on pension-fund voting on corporate proxies By Reuters

© Reuters. Signage is seen at the United States Department of Labor headquarters in Washington, D.C.

By Jessica DiNapoli

NEW YORK (Reuters) – The U.S. Department of Labor on Friday finalized a rule requiring pension funds to vote on shareholder proposals only when there is an economic reason, a change that would curb investors from casting their ballots on many corporate proxies.

The new rule is the latest from the Trump administration targeting investments focusing on environmental, social and governance (ESG) factors.

Last month, the Department of Labor finalized a rule clarifying that pensions must put retirees’ financial interests first when allocating investments, rather than other concerns such as climate change or racial justice.

The rule “makes clear” that pension fund managers do not have to vote every corporate proxy, said Jeanne Klinefelter Wilson, acting assistant secretary at the Department of Labor, on a call Friday afternoon.

“This rule sets appropriate guidelines …to ensure that fiduciaries keep their eyes focused on the financial interest,” of pension fund beneficiaries, Klinefelter Wilson said.

The Department of Labor’s move to rein in voting comes as shareholder initiatives on topics like climate change have gained more backing.

Legislators are already gearing up to try to overturn the rules in January. U.S. Senator Tammy Baldwin, a Democrat from Wisconsin, on Friday announced proposed legislation that would reverse it and give additional control to workers in how the shares in their retirement plans are voted.

Her office in prepared materials said, “It is clear that the Department of Labor wrote this rule to prevent workers from using their voices to influence public companies.”

Senior Department of Labor officials said that the rule was substantially changed from the proposal in August to a more “principles-based approach” aimed at reducing the cost burden for fund managers.

Tom Quaadman, an executive at the U.S. Chamber of Commerce, applauded the rule, saying it will “ensure proxy voting follows a transparent and unconflicted process.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

{n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};
s.parentNode.insertBefore(t,s)}(window, document,’script’,
fbq(‘init’, ‘751110881643258’);
fbq(‘track’, ‘PageView’);

by : Reuters

Source link

Capital Media

Read Previous

Explainer-What’s driving New Caledonian protests against Brazilian mining giant Vale By Reuters

Read Next

Instagram’s redesign shifts toward shopping – here’s how that can be harmful