DOL Technical Release 2026-01 (Apr. 1, 2026)
Available at https://www.dol.gov/sites/dolgov/files/ebsa/employers-and-advisers/guidance/technical-releases/26-01.pdf
The DOL has issued a technical release regarding the use of proxy advisory services in connection with ERISA plan investments. The guidance addresses two issues: the applicability of ERISA’s fiduciary rules to proxy advisors and ERISA preemption of state laws relating to proxy advisors. As background, the fiduciary duty to manage plan assets includes the exercise of proxy voting and other shareholder rights, unless those rights are passed through to participants and beneficiaries under the plan. Here are highlights of the guidance:
- ERISA Fiduciary Rules. The guidance explains that proxy voting and other rights relating to shares held by ERISA plans are plan assets subject to ERISA’s fiduciary rules. To the extent that a proxy advisor exercises any authority or control over the exercise of such shareholder rights, the advisor is a fiduciary under ERISA’s functional test. Advisors may also be fiduciaries as a result of providing investment advice relating to plan property for a fee—whether the advice is generalized or specific to the transaction or client. The DOL opines that proxy services will likely satisfy the five-part test for fiduciary status, although it acknowledges that the ultimate analysis depends on facts and circumstances. It also cautions that disclaimers of fiduciary status are not determinative.
- Preemption of State Laws. According to the guidance, in recent years states have implemented various laws governing securities recommendations and investment advice, such as requiring disclosure when an advisor’s recommendation takes into account nonfinancial considerations. The DOL indicates that this type of disclosure requirement would be “nonconvergent” with ERISA. Because ERISA prohibits the consideration of nonfinancial factors, an advisor’s fiduciary duties would preclude it from providing plan-related advice that would trigger the disclosure requirement. But the DOL explains that whether any particular state law is preempted will depend on the specifics of the law.
EBIA Comment: According to the related news release, the impetus for this guidance was a 2025 executive order aimed at protecting investors—including retirement plan investors—from proxy advisor recommendations that are based on political, rather than economic, motivations (for example, by considering environmental, social, and corporate governance (ESG) and diversity, equity, and inclusion (DEI) factors). The executive order directed the DOL to consider the fiduciary implications of proxy advisors’ actions with respect to ERISA plans. Plan sponsors should evaluate their advisory relationships in light of this guidance, which may necessitate reviewing proxy voting policies and agreements with proxy advisors, ensuring that voting decisions consider only economic factors, and monitoring advisors’ recommendations. For more information, see EBIA’s 401(k) Plans manual at Section XXV.L (“Proxy Voting and Shareholder Rights”).
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