Labor Department holds off on enforcement of ESG rules for 401(k) plans
BPC Staff Mar 11, 2021 | 9:29 pm
1 min read time121 wordsAll Latest News, Banking & Finance, Law & Government
The U.S. Department of Labor said Wednesday it won’t be enforcing a Trump-era rule that makes it tougher for 401(k) plans to invest in socially minded funds, the Wall Street Journal reported. The agency is reviewing a rule finalized in the fall that prevented corporate 401(k) plans from using funds with nonfinancial goals as default investments for employees. The rule also required 401(k) overseers to show that environmental, social and governance (ESG)-focused funds would have just as strong returns as competing funds. The Labor Department signaled that new rules it is exploring might be more friendly to ESG investments. Investment funds flowing into sustainable and ESG funds have soared in recent years, though the funds remain rare in employee-sponsored retirement plans.