A little more than a month again on these pages we introduced the tale of NYC Comptroller John Liu and his high-profile public campaign against a certain large company recently accused of bribing foreign officials. Since then, at least one other state's retirement plan trustee has jumped on the bandwagon.
This begs the question: Should ERISA trustees do the same? More specifically, when does shareholder activism cross the line and constitute a breach of one's fiduciary duty to act solely for the benefit of the beneficiaries? Without getting into the minutia of ERISA (those interested should check out "Is Proxy Voting a Conflict-of-Interest Trap for the ERISA Fiduciary?"), let's review some of the general views on this issue
First, state retirement plans, like all government plans (and those of church associations, too), are not governed by ERISA. So Liu and his counterpart may not have the same stern legal obligation as do fiduciaries operating under ERISA. That itself should make ERISA trustees think twice before following Liu's footsteps. So what, if any, guidelines does Liu operate under when it comes to exercising his fiduciary duty as plan trustee?
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
