The Department of Labor has tried yet again to referee the perennial battle between activist pension funds and corporations over how far each side can push for or against shareholder resolutions.
Robert Doyle, director of regulations and interpretations at the Labor Department, issued a letter last month to the U.S. Chamber of Commerce intended to clarify how much activism is permissible from pension-related funds and what kinds of shareholder resolutions they are permitted to sponsor. Doyle confirmed a department decision from 1994 that pension funds regulated by the Employee Retirement Income Security Act (ERISA) cannot use the proxy process to further causes that have no clear economic benefit to the pension plan. The Chamber promptly heralded the news as “a clear message that union pension trustees need to put workers’ retirement security first, instead of any political agenda.”
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