The Department of Labor (DOL) is turning its focus on a potential new fiduciary rule, along with education on environmental, social, and governance (ESG) factors and implementing SECURE 2.0, said Lisa Gomez, assistant secretary of labor for the Employee Benefits Security Administration (EBSA).
Speaking at the Employee Benefit Research Institute’s 2023 Spring Policy Forum in Washington, D.C. last week, Gomez remarked how EBSA is prioritizing education on the meaning of the ESG rule, especially towards plan sponsors and fiduciaries.
The ESG rule has faced a series of pushbacks and political constraints since it was finalized in November, largely because plan sponsors would have the option to consider climate change and other environmental and social factors when selecting retirement plan investments.
While most organizations have applauded the rule for its neutrality in considering ESG factors, others have claimed the rule jeopardizes retirement investments and violates the Employee Retirement Income Security Act of 1974 (ERISA).
Gomez touched on those claims during a February webinar with sustainable investing advocacy organization Ceres Accelerator and the Environmental Defense Fund, in which she reaffirmed that the rule extends investment opportunities for workers looking to add sustainability in their investments.
“We’re just hopeful that this rule means that people won’t have missed opportunities in order to increase their investment performance or be precluded from taking steps that can protect their savings from financial risk,” Gomez said during the webinar.
Incoming fiduciary rule?
In her remarks, Gomez added that the DOL is prioritizing a new fiduciary rule, and one that would expand who is considered a fiduciary under ERISA by amending its current regulatory definition.
Gomez drew upon the previous fiduciary rule in 2016, which was struck down by courts in 2018, noting that the current retirement market has vastly changed since.
“Things have changed so much in the retirement market, and we are trying to acknowledge those changes, reflect how the system works best in this new world, reflecting on challenges there have been to the rule since 2016, and trying to come up with a proposal that will reflect all of that,” Gomez said in her comments to EBRI.
SECURE 2.0 projects
Gomez also added that EBSA is currently working on “a number of different projects” concerning SECURE 2.0, including organizing a “lost and found” retirement plan participant database for those who lose track of their 401(k) or pension plan, as well as studying disclosure requirements and notices.
SEE ALSO:
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- DOL’s Walsh, Gomez Discuss New ESG Rule
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
