Final Rule on Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights

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Ernie Guerriero, CLU®,ChFC®,CEBS,CPC®,AIF®,RICP® 

Today, the U.S. Department of Labor released a final rule under the Employee Retirement Income Security Act (ERISA) to empower plan fiduciaries to safeguard the savings of America’s workers by clarifying that fiduciaries may consider climate change and other environmental, social, and governance (ESG) factors when they make investment decisions and when they exercise shareholder rights, including voting on shareholder resolutions and board nominations.

This is welcome news as it opens the investment line-up and offers guidance from the DOL.  Advisors should discuss this opportunity with plan sponsors and fiduciaries to determine if ESG investing is appropriate for their plan participants. ESG Final Rule (002)