March 10, 2021

Fred Reish Evaluates DOL’s Decision Not to Enforce Final Rules on ESG and Proxy Voting

ThinkAdvisor

Benefits and executive compensation partner Fred Reish spoke to ThinkAdvisor about the impact of the Department of Labor (DOL) no longer enforcing two agency rules that would limit environmental, social and governance (ESG) investments in 401(k) plans and ESG considerations in fiduciary proxy votes.

In “DOL Won’t Enforce New Rules on ESG in Retirement Plans,” ThinkAdvisor detailed how the DOL is abandoning two rules that would have made it more difficult for retirement plans to consider ESG factors in their investment options and proxy votes: “Financial Factors in Selecting Plan Investments” and “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights.”

Reish stated the rule on limiting 401(k) investments “has had a chilling effect on plan fiduciaries.” He said the department’s new position on the rule “should reassure plan fiduciaries and advisers that ESG factor investments can properly be used in tax-qualified, ERISA-governed retirement plans.”

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