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Employer-sponsored retirement plans should focus on benefiting employees
Washington, D.C.—June 24, 2020: Today, Consumers’ Research announced its support for the Department of Labor’s efforts to clarify the fiduciary duties of employer-sponsored retirement plans under the Employee Retirement Income Security Act (ERISA). Investment decisions for employer-sponsored retirement plans should be just that – investment decisions – with the sole goal of prudently growing retiree’s accounts.
Will Hild, the Executive Director of Consumers’ Research, said:
“Regardless of the goals of ESG investing, including factors unrelated to returns in the analysis of investments in pension and employee investment accounts is a clear violation of the longstanding fiduciary duty that employers and fund managers owe employees according to the law. ERISA protections were created to allow employees to sleep soundly at night, secure in the knowledge that their employers have a fiduciary duty to ensure the proper stewardship of their retiree accounts.”
“The Department of Labor’s proposed rule would go a long way toward preventing management’s personal politics from undermining that foundation of financial stewardship. Employers and pension fund managers have no right to make political statements at the expense of retirees’ market returns.”
Consumers’ Research believes that it is in the best interest of consumers for the DOL to clarify that ERISA fiduciary requirements do not allow for ESG investment considerations in employer-sponsored retirement plans that are not exclusively focused on the plan’s beneficiaries. We look forward to providing consumer feedback on the proposed rule.
About Consumers’ Research:
Consumers’ Research, founded in 1929, is the nation’s oldest consumer organization that seeks to increase the knowledge and understanding of issues, policies, products, and services of concern to consumers. For more information, visit: https://consumersresearch.org/ and follow Consumers’ Research on Twitter at @ConsumersFirst.