Private investment fund managers who oversee funds subject to Title I of ERISA and are not feeder funds (referred to here as “ERISA Funds”) are facing some important deadlines. By December 1, 2023, these managers must ensure compliance with the Department of Labor’s (DOL’s) 2022 regulation that specifies fiduciary responsibilities regarding plan investment selection and proxy voting. This call to action was emphasized in a recent article by law firm Seward & Kissel LLP, widely recognized for their expertise in investment management.
While the full text of their recommendations has not been made available, we can give a general summary of what ERISA fund managers should be doing to prepare for the 2022 regulation deadline.
- The “ERISA Funds” managers must fully understand the DOL regulations, not only the 2022 iteration but also what is expected of them under Title I of ERISA. The specific details of these regulations can significantly impact how a fund is managed.
- ERISA fund managers should conduct thorough reviews of their proxy voting policies and procedures. The DOL’s regulations call for explicit fiduciary responsibilities in proxy voting, signalling the need to ensure these policies are up to date and in compliance.
- Before December 1, 2023, fund managers will need to implement any necessary changes and ensure they are fully compliant with the new regulation. This will most likely require working with legal counsel to ensure all amendments are correctly and legally sound.
Fund managers can visit this Seward & Kissel report to learn more about the fiduciary responsibilities specified by the DOL. As we approach the December 2023 deadline for the DOL’s regulation to take effect, proper understanding and compliance with these rules could mean the difference between operability and potential legal complications.