The Retirement Proxy Protection Act clarifies how retirement plan fiduciaries can manage shareholder voting rights, including proxy votes, for stocks held in pension and retirement plans. The bill requires fiduciaries to base proxy voting decisions solely on the financial interests of plan participants—not on non-financial goals like social or environmental objectives—and specifies that they don't have to vote every proxy. The legislation creates a "safe harbor" that protects fiduciaries from liability if they adopt a policy limiting proxy voting to holdings where the plan owns at least 5 percent of company assets or to issues with material financial impact on the investment. The bill also requires fiduciaries to monitor any investment managers or proxy advisory firms they hire to help with voting decisions. These changes take effect on January 1, 2026, and apply to retirement plans governed by the Employee Retirement Income Security Act of 1974.
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