May 2026 - Spotlight on Benefits

DOL Takes Aim at Proxy Advisory Services—What Plan Fiduciaries Need to Know About Technical Release 2026-01 and Their Fiduciary Duties Related to Proxy Voting

President Trump is strongly critical of proxy advisory services and last year directed several federal agencies — including the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) — to do something about it. In his December 11, 2025, executive order, President Trump stated that “proxy advisors regularly use their substantial power to advance and prioritize radical politically-motivated agendas — like ‘diversity, equity, and inclusion’ and ‘environmental, social, and governance’ — even though investor returns should be the only priority.¹

Even before the executive order, DOL’s Employee Benefits Security Administration (EBSA) drew a legal “line in the sand” regarding what one of its officials termed “politicized investing,”² reminding plan fiduciaries that ERISA does not permit them to “subordinate the interests of the participants and beneficiaries in their retirement income or financial benefits under the plan to other objectives.”³ More recently, EBSA Assistant Secretary Daniel Aronowitz announced that EBSA will prioritize civil investigations involving breaches “of the duty of loyalty [including self-dealing and conduct promoting] goals unrelated to participants’ best interests, such as the promotion of environmental, social, or governance objectives.”⁴

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ERISA Litigation Roundup: Supreme Court Unanimously Rules Multiemployer Pension Plans May Use Post-Measurement-Date Actuarial Assumptions to Calculate Withdrawal Liability

On May 21, 2026, the US Supreme Court issued a unanimous decision in M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 23-1209, resolving a circuit split on a question of enormous financial consequence to employers participating in multiemployer pension plans (MPPs): whether a plan’s actuary must adopt its actuarial assumptions for purposes of withdrawal liability calculations on or before the “measurement date” for those calculations, or whether it may instead select assumptions after that date. In an opinion authored by Justice Jackson, the Court held that ERISA does not require actuarial assumptions to be adopted “as of” the measurement date, but stressed that these actuarial assumptions must still reflect the actuary’s “best estimate of anticipated experience under the plan,” which generally requires that the assumptions reflect information about the plan’s conditions as they stood on the measurement date.

Background

Under ERISA and the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), an employer that withdraws from an underfunded MPP must pay “withdrawal liability,” which is its proportionate share of the plan’s unfunded vested benefits (UVBs). The statute requires this liability to be calculated “as of” the last day of the plan year preceding the employer’s withdrawal, or the “measurement date.” Calculating UVBs requires actuarial assumptions about the plan and its future benefit obligations, most notably a discount rate that converts the plan’s future liabilities to present-day dollars. The discount rate dramatically affects the total withdrawal liability figure.

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The IRS Makes It Easy for Employers to Set Up an Educational Assistance Plan

The Internal Revenue Service (IRS) recently issued a template plan document that employers can use to establish a qualified educational assistance program under Section 127 of the Internal Revenue Code (Code). For employers looking for a straightforward plan, the IRS has made it simple. For employers with more tailored objectives, including around course restrictions, grade requirements, clawback provisions, or benefit allocation, a custom plan document may be a better option.

What is a Section 127 Program?

A qualified educational assistance program under Section 127 of the Code allows employers to provide up to $5,250 per employee per year in tax-free benefits for tuition, fees, books, supplies, equipment, and qualified education loan repayments. The $5,250 cap will be indexed for inflation beginning with taxable years after 2026.

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Thinking ESOPs: Department of Labor Identifies New Enforcement Priorities

The Employee Benefits Security Administration’s (EBSA) April 2026 Field Assistance Bulletin marks a pivotal change in Department of Labor enforcement for ESOPs. The new guiding principles and enforcement priorities are designed to curb aggressive, unpredictable actions by the DOL, especially around ESOP valuation, and to ensure fair treatment for plan fiduciaries. These changes prioritize targeting only the most serious violations, require advance notice and clarity for regulated parties, and mandate leadership oversight for significant enforcement initiatives. This edition of Thinking ESOPs provides a detailed analysis of EBSA’s historical approach, the impact of these new priorities, and practical takeaways for ESOP stakeholders navigating this evolving regulatory landscape.

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