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Optimize Your Next Proxy with Retirement Plan Participants

Mutual funds with growing share positions held in retirement plans face unique challenges during proxy campaigns.

Optimize Your Next Proxy with Retirement Plan Participants

Below is an overview of the process for managing proxy solicitation with participants and sponsors in employer-sponsored retirement plans. Understanding the process can help clarify available options— and illuminate ways to achieve your proxy goals.


Employer-sponsored retirement plans are workplace programs established by employers to help employees save for retirement. In the Defined Contribution industry, employers who establish these retirement plans are called “plan sponsors.” The employees who take advantage of these plans are called “plan participants.” Plan sponsors—usually with the help of financial advisors— establish plan rules and decide which investments are best suited for their participants.


Soliciting proxy votes from registered and beneficial shareholders is typically straightforward, largely because vote entitlements and shareholder records are transparent and easily accessible. However, proxy campaigns involving retirement plans can be more complicated.


Be proactive.

These best practices can help you achieve your proxy goals. Build relationships with plan sponsors and administrators. Funds who have strong relationships can optimize outcomes during proxy campaigns. If there’s a contentious item on the proxy, leveraging relationships can help maximize participation. Suggest contracts that assign voting authority to plan sponsors.
Mutual funds who seek to place products in employer sponsored retirement plans might consider encouraging sponsors to retain vote authority, or promote echo voting, so they can streamline the process and minimize the burden on plan participants.

Plan for data delays.

You can’t prevent poorly structured data files from coming in, but you can help expedite delivery. Some proactive mutual funds reach out to plan administrators in advance of the record date, so they can receive pass-thru files in a timely matter. Allow plenty of time between record date and meeting date in case of data delays.

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