What You Need to Know
- A new request for information follows Biden’s executive order issued last May.
- One question asks if EBSA should use Form 5500 to collect data on climate-related financial risk to pension plans.
- Another question: Do any guaranteed lifetime income products (e.g. annuities) help individuals mitigate the effects of some climate-related financial risk?
The Labor Department released Friday a request for information seeking comment on further actions Labor’s Employee Benefits Security Administration should take to protect retirement savings and pensions from threats of climate-related financial risk.
President Joe Biden issued an executive order in May on climate-related financial risk, which directed the Labor secretary to reconsider rules enacted under the Trump administration limiting environmental, social and governance focused investments in retirement plans.
In October, Labor proposed a new rule that will make it easier for 401(k) plans to choose investments based on ESG factors.
Labor’s proposed rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, is designed “to empower plan fiduciaries to safeguard the savings of America’s workers by making it clear that fiduciaries may consider climate change and other ESG factors when they make investment decisions and when they exercise shareholder rights, including voting on shareholder resolutions and board nominations,” the RFI states.