On January 30, the final rule titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights”—a.k.a. the “ESG rule”—became effective. American Retirement Association CEO Brian Graff recently sat down with the Employee Benefits Security Administration’s Tim Hauser to explore the implications and implementation of this new rule.
In a wide-ranging conversation, the discussion with Hauser—who is Deputy Assistant Secretary for Program Operations of the Employee Benefits Security Administration (EBSA) and, as such, is the chief operating officer of the agency—covered:
- The focus of the new rule.
- What changed from the 2020 regulation—and why.
- The implications of participant preferences.
- Application of these standards to “screened” options, managed accounts, and alternative investments.
- How the prudence standard applies to ESG-themed and other values-driven investment options.
- How fiduciaries can/should fulfill responsibilities with regard to proxy voting.
- EBSA’s enforcement/review focus going forward.