Pension plans & proxy voting
What you need to know
- Proxy voting within pension funds has become increasingly contentious and politicized. Just two investment firms control the proxy advisory market in the United States.
- Retirement plan fiduciaries wishing to preserve an unbiased, trustworthy and democratic proxy voting process must rely on neutral, transparent and established third-party partners throughout their entire elections.
- SBS DirectVote provides online or paper proxies with full-service end-to-end election management with in-depth experience in the proxy advisory field.
- SBS has more than 30 years of experience managing in-person, mail-in, online and hybrid elections for member organizations in the United States.
More than 30 percent of Americans have a pension plan. These retirement plans are responsible for focusing on their fiduciary responsibilities to shareholders and pensioners — that applies to proxy voting as well. The Department of Labor (DOL) recently released a rule barring retirement plan fiduciaries from casting corporate-shareholder proxy votes focused on environmental, social and/or governance (ESG) issues. The DOL determined too much personal influence and political advocacy had been part of the proxy advisory system and such focus did not advance the financial interests of participants in those retirement plans.
As pension funds shift more of their holdings to private equity, large institutions and private fund managers become more influential. When it comes to the proxy advisory market, just two investment firms control nearly all of the pension plan proxy voting processes across the U.S.
In order to preserve an unbiased, trustworthy and democratic proxy voting process, it is crucial to rely on a neutral, transparent and established third-party partner throughout the entire election.
Pension Plan Nominations
In some organizations, it is common for a candidate to collect signatures from other members to support their candidacy. Given the reach of today’s pension plans and varying safety precautions, it is optimal to make the nominations process digital and as efficient as possible.
SBS’ DirectNominations online candidate nomination software allows for custom built nominee applications featuring your choice or questions candidates must answer and any forms the organization needs them to complete.
The system makes obtaining digital signatures simple – a petition link can be emailed to qualified recipients to complete and sign electronically. Candidates also have the option to upload a signed paper petition. DirectNominations makes it easy and convenient for potential candidates and, for administrators, significantly reducing the amount of work generated by a typical nominations process.
Once the nominations period ends, an organization’s nominations committee or administrator reviews candidates and decides who fits the criteria to be on the ballot. DirectNominations standardizes the nominations process and simplifies the review process for committee members.
Pension Plan Elections
Elections take all shapes and sizes, from in-person or mail-in balloting to online voting to a hybrid of ballot options. It is crucial to avoid even the slightest appearance of impropriety for any election, particularly when proxy ballots are in play. Having a secure, transparent and established process reassures all stakeholders that they can trust the results.
SBS DirectVote provides full service, end-to-end election management with in-depth experience in the proxy advisory field. SBS has more than 30 years of experience managing in-person, mail-in, online and hybrid elections for member organizations in the United States.
After new board candidates have been voted in and typically during the first board meeting following the election, board members will elect new leaders for the coming year (board chair, treasurer, etc.). Board members are often vying for certain positions and there can be particular motivations for some to ascend to the position of their choice. These votes are so crucial, and often the organization’s attorney will oversee them. Secret ballots are often required for these votes, but that picture has become more complicated as in-person meetings are less common.
SBS provides DirectVoteLive software to conduct voting securely and completely anonymously during any virtual or hybrid meeting, regardless of where members are participating. DirectVoteLive requires credentialed access and can only be accessed by participants and hosts after multi-layer verification. It is also powered by industry-leading security, with complete data encryption at every stage, round-the-clock monitoring and intrusion prevention.
As the proxy voting process for pension plans becomes more contentious and complex, the need has become great for an unbiased, trustworthy third-party partner offering multiple proxy voting options. SBS is your end-to-end governance software provider with proven experience.
SBS offers world-class security, platinum support and service and a proven process utilized in hundreds of elections every year. SBS is a privately-owned family business and is not controlled by outside investors. Instead, we focus on building strong partnerships, investing in our innovative solutions and helping you accomplish your election goals.
If you have questions about the proxy voting in pension plans, contact us any time, we’re here to help.