The U.S. Department of Labor (DOL) shook up the retirement plan world in June when it issued a new proposed regulation that caused a lot of confusion about the role of ESG investments in retirement plans. Instead of adding clarity, the proposed regulation muddied the waters. As a result, the DOL received what may be a record number of comment letters, almost all of them critical of the proposal. The comments generally called for a final rule focusing on prudent investment decisions across the board, treating ESG investments the same as other investments and removing ESG-specific standards.

Fortunately, the comments received consideration. On November 13, 2020, the DOL published the final rule regarding “Financial Factors in Selecting Plan Investments” (the Pecuniary Rule). The final rule no longer singles out ESG for special consideration. Instead, it draws a roadmap for fiduciaries to consider all investments, focusing on their benefit to participants rather than their type. In this paper, Bradford Campbell, a nationally recognized expert on employer-sponsored retirement plans, offers his insight and perspective on the final ruling.


3341390.1.1