Insights
Kent Mason Featured in Pensions & Investments Article Discussing Department of Labor Proxy-Firm Guidance
- Published Date: April 27, 2026
On April 27, 2026, Pensions & Investments published an article titled, “DOL proxy-firm guidance prompts legal experts to urge plan sponsor review,” where Davis & Harman Partner, Kent Mason, was quoted explaining that the guidance appropriately reminded proxy advisors that they could be fiduciaries to the extent they fit within the five-part test.
On April 1, 2026, the Department of Labor (DOL) issued a technical release providing guidance regarding proxy advisory services. Specifically, the release stated that proxy advisors “exercising ‘any authority or control’ over shareholder rights attributable to ERISA plan assets are functional fiduciaries under ERISA.” Additionally, a proxy advisor may be considered a fiduciary if it satisfies DOL’s five-part test.
The five-part test defines a person as an “investment advice” fiduciary if the following conditions are met:
1. They provide advice or make recommendations regarding investing in, purchasing, or selling securities or other property while receiving a fee;
2. The advice is provided on a regular basis;
3. There is a mutual understanding with the plan, plan fiduciary, or individual retirement account (IRA) owner; that
4. The advice will serve as a primary basis for investment decisions with respect to plan or IRA assets; and
5. The advice will be individualized based on the particular needs of the plan or IRA.
The article discusses how plan sponsors need to closely examine their arrangements with proxy advisors to better understand whether they fall under DOL’s “fiduciary umbrella.” Mason is quoted stating that “[i]nstead of changing the test, [DOL] is very appropriately remind[ing] proxy advis[o]rs, you could be fiduciaries if you fit within the five-part test. A lot of proxy advis[o]rs simply won’t fit within the five part-test, but some might.”
A link to the article can be found here.
