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<< Older News  |  September 25, 2020

News

All News > Retirement Plan Investments - ESG

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Making Sense of ESG Investing
Cammack Retirement Group Link to more items from this source
Sept. 24, 2020

"There will be more to come from the DOL on ESG investing in retirement plans. However, the increasing prominence of ESG in investment decisions has become significant across the industry. On the supply-side, an increasing number of portfolio managers are considering ESG factors in their portfolios. On the demand-side, 85% of individual investors expressed interest in sustainable investing in 2019, up 10 percentage points from 2017. ESG interest is even greater for the Millennial Generation[.]"

Tags: Retirement Plan Investments - ESG

Getting Into the ESG Disclosure, Rating and Ranking Game
Seyfarth Shaw LLP Link to more items from this source
Sept. 2, 2020

"Because disclosure is largely voluntary, the sustainability ecosystem is made up of [1] organizations that provide different sets of disclosure frameworks and standards for ESG self-reporting and [2] organizations that rate and rank company ESG efforts by aggregating publicly-available data, sometimes confirming findings with organizations and sometimes not."

Tags: Retirement Plan Investments - ESG

DOL Rules on Both Sides of the Social Investing Issue
MarketWatch Link to more items from this source
[Opinion]
Aug. 31, 2020

"While clearly condemning social investing in ERISA plans, the DOL Secretary issued a letter on May 11 to the Thrift Savings Plan -- the retirement saving vehicle for federal government employees -- ordering it to not include equities in Chinese companies in its investment options."

Tags: Retirement Plan Investments - ESG

Should ESG Metrics Be Included in Executive Incentive Plans?
Meridian Compensation Partners, LLC Link to more items from this source
Aug. 31, 2020

"For some companies, it may make perfect sense to tie pay to ESG metrics. Certain industries have clearer ESG initiatives that are already measured, tracked, and disclosed, such as utilities and energy ... and consumer products companies ... [F]or other companies ... it may be too soon to consider including such metrics into pay programs. [In] either case, it is important to identify critical focus areas for your organization, understand your current state, and increase transparency, both internally and externally."

Tags: Executive comp  •  Retirement Plan Investments - ESG

Defining ESG: Clarifying the Myths and Facts (PDF)
Institute for Pension Fund Integrity [IPFI] Link to more items from this source
Aug. 27, 2020

"With efforts underway by the [DOL] and other government agencies to address ESG investing in pension plans and other investment products, ... the investment strategy remains ambiguous and lacks a standardized definition. This paper seeks to shed light on these ambiguities. The definition and background of ESG will be examined, the variations in ESG definitions across firms will be identified, case studies on two ESG funds will be analyzed, and a recommendation for more formal definitions will be made."

Tags: Retirement Plan Investments - ESG

Rolling Stone Magazine Slams Recent DOL Retirement Plan Rules
401(k) Specialist Link to more items from this source
Aug. 25, 2020

"It says a lot about how far Boomers have come that their proverbial bible, Rolling Stone, is focused less on sex, drugs and rock and roll, and more on retirement savings. The publication that Jann built is out with a piece on the looting of the American retirement system by Wall Street fat cats -- evergreen adversaries that provide a constant and convenient foil."

Tags: Fiduciary Duties  •  Retirement Plan Investments  •  Retirement Plan Investments - ESG

Despite Just a 30-Day Window, 8,700 People Comment on DOL's Efforts to Outlaw ESG in 401(k) Plans
RIABiz Link to more items from this source
[Opinion]
Aug. 21, 2020

"The DOL could theoretically make a good case for banning ESG filters from the pension, DC and DB assets that it oversees. Namely, it could say squishy beliefs have no place in long- or short-term investment portfolios. Let the market be the market. The problem is the Labor Dept. is barely making that case ... The result ... is that the public, the RIA business and much in-between just gave it an 'F' in the warning grades portion of the semester."

Tags: Retirement Plan Investments - ESG

The Proposed DOL ESG Regulation and the Public Reaction
Law Offices of Albert Feuer, via SSRN Link to more items from this source
Aug. 20, 2020

"Many commenters suggested that the proposed regulations be significantly revised, and there appeared to be broad agreement on two revisions: [1] The regulation should permit an investment alternative may be a qualified default investment alternative for a self-directed plan regardless of whether the alternative makes any use of ESG/Sustainable consideration, such as using the S&P® index; and [2] The regulation should distinguish between the use of ESG/Sustainable considerations to determine the economic value of an investment[.]"

Tags: Retirement Plan Investments - ESG

Sustainability Matters: Overwhelming Opposition to Proposed Regulation Limiting the Use of ESG in Retirement Plans
Morningstar Link to more items from this source
Aug. 20, 2020

"[T]he DOL provided for only a 30-day comment period on a matter of significant and growing interest to investors and retirement-plan participants and beneficiaries. Despite this unusually short comment period, the Notice of Proposed Rulemaking drew 8,737 comments, including several petition letters signed by thousands of individuals.... 95% of comments were opposed [to the proposal]."

Tags: Retirement Plan Investments - ESG

Greater Adoption of ESG Linked to Acceptance as Fiduciary Duty
Pensions & Investments Link to more items from this source
Aug. 17, 2020

"ESG investing is reaching an inflection point, as the risks and opportunities -- and the responsibility to deal with them -- gets harder for pension funds and other institutional asset owners to ignore.... The evolution means that ESG investment decisions are more fully integrated across portfolios and all asset classes. A survey of 500 global institutional investors in the second quarter of 2020 ... found that 51% now fully integrate ESG into their investment approach, compared with 36% just two quarters earlier."

Tags: Retirement Plan Investments - ESG

Industry Sounds Off Against DOL Proposal on ESG
Pensions & Investments Link to more items from this source
Aug. 17, 2020

"More than 1,500 comment letters were filed from asset owners, asset managers, trade associations, record keepers, lawmakers and others, many of whom took issue with the [DOL]'s initiative, which was unveiled June 23. It's unclear if the comments could prompt the [DOL] to take another look at the rule or when a final rule might be issued."

Tags: Retirement Plan Investments - ESG

DOL Is Protecting Public Pensions from Political Investments
Institute for Pension Fund Integrity [IPFI] Link to more items from this source
[Opinion]
Aug. 17, 2020

"There are many laudable initiatives that individuals, religious endowments, schools, and other private entities may wish to consider. However, it is never correct to impose personal political motives on pension funds. This principle is even more prevalent given the massive financial ramifications that the economic fallout of the COVID-19 pandemic has had on pensions."

Tags: Retirement Plan Investments  •  Retirement Plan Investments - ESG  •  State and Local Government Plans

More North American Companies Expressing Interest in ESG Measures for Executive Pay Programs
Willis Towers Watson Link to more items from this source
Aug. 12, 2020

"Just over a quarter of survey respondents (27%) currently include ESG metrics in their executive incentive plans either as a separate performance measure, a modifier or both. Another 2% plan to include ESG measures in their plans next year, while an additional 27% are considering adding them over the next three years."

Tags: Executive comp  •  Retirement Plan Investments - ESG

Fiduciary Update, August 2020
CAPTRUST Link to more items from this source
Aug. 12, 2020

"[This article] looks at recent developments on cases, decisions, and settlements alleging the overpayment of fees and the retention of underperforming investments in 401(k) plans. [It] also provides perspective on why ESG investments are getting increased attention, the latest in participant suits filed to recover cyberlosses, and more."

Tags: Fiduciary Duties  •  Retirement Plan Investments - ESG

Proposed Changes to DOL Regs on ESG and Other Investments by Fiduciaries: What You Should Know and How The Wagner Law Group Responded
The Wagner Law Group Link to more items from this source
[Opinion]
Aug. 12, 2020

"The proposed rule ... goes beyond its stated objectives to affect how fiduciaries make all investment decisions.... In addition, the Proposed Rule would require fiduciaries to consider 'available alternative investments' in making investment decisions, without guidance as to what this would mean, and without recognizing that the best practice of comparing investment alternatives is not universally applicable to all circumstances.... The Proposed Rule does not define ESG Factors."

Tags: Retirement Plan Investments - ESG

Editor's Pick DOL Asks RIAs Chilling Questions About Use of ESG Products
Financial Advisor Link to more items from this source
Aug. 11, 2020

"The EBSA enforcement letter sent to RIAs requests every investment and fiduciary policy, procedure, minutes of meetings, communications, performance data and audit, and even names of addresses of anyone who had input on firms' ESG investment decisions."

Tags: Fiduciary Duties  •  Retirement Plan Investments - ESG

Dalbar: DOL's Proposed ESG Rule Will Hurt Plan Participation, Contributions
Financial Advisor Link to more items from this source
[Opinion]
Aug. 6, 2020

"The [DOL] gravely erred in its proposal to limit ESG investing, which will hurt both participation levels and contributions in retirement plans ... Dalbar said in a comment letter.... If the DOL tries choosing the investments employees can select, it ultimately will dictate how many employees participate in a workplace plan and how much they contribute, the company argued."

Tags: Fiduciary Duties  •  Retirement Plan Design  •  Retirement Plan Investments - ESG

The Premises of the DOL Proposed Reg for Selecting ERISA Plan Investments
Law Offices of Albert Feuer, via SSRN Link to more items from this source
[Opinion]
Aug. 6, 2020

"The proposed regulations rely on incorrect premises. The most important incorrect premise is that careful, prudent, skillful, and diligent ERISA plan fiduciaries will, like the DOL and unsophisticated investors, rely on slogans, such as those denigrating or praising ESG/sustainable investing, to make direct or indirect plan investments.... The second most important incorrect premise is that plan fiduciaries may only use pecuniary factors to select and monitor investment options for participants and beneficiaries."

Tags: Retirement Plan Investments - ESG

DOL Tells Plan Fiduciaries to Stay in Their Lane Regarding ESG Investing
Vinson & Elkins LLP Link to more items from this source
[Guidance Overview]
Aug. 5, 2020

"[W]hile the proposed rule, if adopted, will increase fiduciary pressure for U.S.-based benefit plan investors, it will not directly impose requirements on most external public investment vehicles ... Moreover, absent action by States, it will not apply to state-managed pension funds ... By essentially assuming that ESG factors are non-pecuniary and requiring that their pecuniary nature meet generally accepted investment theories, the proposed rule could inadvertently create support for integrated reporting."

Tags: Fiduciary Duties  •  Retirement Plan Investments - ESG

Collected Comment Letters to EBSA on Proposed Regs for ESG Investments
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
[Opinion]
Aug. 5, 2020

Published comment letters submitted in response to EBSA's June 30 proposed regs on fiduciary considerations for ESG investments in retirement plans. Deadline for comments was July 30, 2020. (1,094 letters are online as of August 5.)

Tags: Fiduciary Duties  •  Retirement Plan Investments - ESG

Funds' Use of ESG Integration and Sustainable Investing Strategies: An Introduction (PDF)
Investment Company Institute [ICI] Link to more items from this source
Aug. 5, 2020

16 pages. "To promote the understanding of investors, other market participants, regulators, and others, [ICI's ESG Working Group] agreed that it would be good practice for funds to use consistent terminology to describe ESG strategies in their public communications. This publication sets forth the working group's understanding of the range of those strategies and explains how a fund investor might differentiate among them."

Tags: Retirement Plan Investments - ESG

Should a 401(k) Fiduciary Treat ESG as an Asset Class, a Stock Valuation Factor, or Neither?
Fiduciary News; free registration required Link to more items from this source
Aug. 4, 2020

"Defining ESG more precisely is ... difficult ... However, in general terms, it's very clear what ESG is not. It is not an asset class.... Is ESG simply just another component used to determine the proper valuation of a stock? If so, how might it find its way as just another data point for a stock analyst's spreadsheet'."

Tags: Fiduciary Duties  •  Retirement Plan Investments - ESG

DOL Provides Guidance on ESG Investing
Foley & Lardner LLP Link to more items from this source
Aug. 4, 2020

"[T]he DOL in its proposed rule intends to 'update' and 'clarify' its longstanding investment duties' regulation. According to the DOL announcement, 'the proposed rule is intended to provide clear regulatory guideposts for plan fiduciaries in light of recent trends involving ESG investing.' ... There are five core additions to the DOL's existing 1979 regulation that are being proposed[.]"

Tags: Fiduciary Duties  •  Retirement Plan Investments - ESG

IRI Comment Letter to DOL on ESG Proposal (PDF)
Insured Retirement Institute [IRI] Link to more items from this source
[Opinion]
July 31, 2020

"IRI and our members respectfully urge the Department to withdraw the Proposal.... Singling out the ESG investment category for unique treatment and scrutiny is inconsistent with well-established, principles-based ERISA regulations. Further, the ESG Proposal will trigger unintended consequences, expose plan fiduciaries to additional regulatory scrutiny, and heighten litigation risks related to the selection of all plan investment options."

Tags: Retirement Plan Investments - ESG

DOL Issues Proposed Rule on ESG Investing for ERISA Plans: Implications for Plan Sponsors and Investment Managers
K&L Gates Link to more items from this source
[Guidance Overview]
July 29, 2020

"Plan fiduciaries would need to ensure ... that investment policy statements do not have a different investment selection or monitoring process for ESG investments than the process for investments that do not consider ESG factors. Plan sponsors and other responsible fiduciaries also have a responsibility to monitor their consultants and advisers ... The Proposed Rule also includes specific guidance for fiduciaries of individual account plans[.]"

Tags: Fiduciary Duties  •  Retirement Plan Investments - ESG


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