Today, ERIC filed comments on the Department of Labor’s proposed rule, “Factors in Selecting Plan Investments.” The proposed rule states that ERISA’s duty of loyalty prevents plan fiduciaries from investing in ESG vehicles when the underlying investment strategy of the vehicle is to subordinate return or increase risk for the purpose of non-pecuniary objectives. In general, our comments support the promulgation of a final rule and provided recommendations to eliminate unnecessary administrative burdens and to prevent increases in legal liability. Specifically, our comments made the following recommendations:
- Promulgation of a final rule
- Removal of the requirement to compare available alternative investments under paragraph (b)(2)(ii)(D)
- Removal of the enhanced documentation requirement under paragraph (c)(3)(ii)
- Use of the term “non-pecuniary” instead of “ESG”
- Removal of “All Things Being Equal Approach” under paragraph (c)(2)
- Eliminate the prohibition of ESG options or components in QDIAs
Again, thank you to everyone who provided their thoughts and comments. To read our comments, click here.