Client Alert

DOL Issues New ERISA Interpretive Bulletins Regarding Economically Targeted Investments and Proxy Voting

October 24, 2008

Larry Hass, Josh Sternoff and Rebecca Cambreleng

On October 17, 2008, the U.S. Department of Labor (DOL) published two interpretive bulletins addressing the ability of ERISA plan fiduciaries to consider non-economic factors when making decisions regarding plan investments. In the bulletins, DOL sends a strong message to plan fiduciaries that ERISA requires them to consider as a threshold matter only the plans economic interests when making decisions regarding the acquisition, management and disposition of plan investments. Only where a plan fiduciary has thoroughly and diligently reviewed the course of action to ensure that the decision is in the best economic interests of the plan, factoring in the attendant costs of the proposed course of action, may the fiduciary consider any other rationale for its investment actions be it support of green investing, support for union labor projects, or voting proxies on shareholder activist matters.

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