Insured Retirement Institute applauds DOL for not enforcing two Trump-era regulations

The Insured Retirement Institute (IRI) voiced its support for a recent U.S. Department of Labor (DOL) decision not to enforce two Trump administration-era regulations.

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One of the Trump-era rules that won’t be enforced is “Financial Factors in Selecting Plan Investments. The other is called “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights.”

“We strongly support today’s decision by the DOL to temporarily forgo enforcement of the ESG and proxy voting rules,” Jason Berkowitz, IRI chief legal and regulatory affairs officer, said on March 10. “This will provide an opportunity for the Department to re-evaluate and possibly revise or withdraw them.”

The first rule in question modified the long-standing regulatory guideposts plan fiduciaries must follow when selecting investment options for plan participants in their retirement plans. IRI said enforcement of it would impair plan sponsors’ ability to consider environmental, social, and governance (ESG) factors. IRI provided comments to DOL during the rulemaking process that it was unnecessary. In its comments, IRI identified potential impacts on investment selection and successful plan financial performance, heightened risks of regulatory burdens, and inconsistencies with the Department’s rules.

“The final rule reflected the Trump administration’s posture regarding ESG investments without adequately considering the broader implications of the rule,” Berkowitz said. “We believe the final rule would make the investment selection process for plan sponsors much more complicated and burdensome than is necessary to effectively protect plan participants,” he added.