The tie-breaker rule in ESG regulation has definitely led to confusion—if not outright controversy. If all else is equal and two investments are indistinguishable, the one incorporating ESG principles would then “break the tie.”
American Retirement Association Brian Graff notes that people are clear about its application in the defined benefit space but less so in the defined contribution world. In the following short clip, he asks the Department of Labor’s Tim Hauser to clarify how he sees it apply to 401(k) plans.
Here’s what Hauser has to say.
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