PLANSPONSOR Weekend Newsdash
Week ending March 10th, 2018

Happy Friday, readers! This weekend’s mailing focuses on the timely topic of ESG investing. Still something of a novelty in the ERISA retirement planning arena, the topic of environmental, social and governance (ESG) minded investing is gaining significant attention among plan sponsors and participants across the United States. As outlined below, there is an increasing awareness that ESG factors can be material to both short- and long-term investment performance, putting the onus on asset owners and fiduciaries to reconsider how their portfolios may be impacted by any number of broad challenges—from global warming and resource scarcity to corporate corruption and social movements. We hope you will share some of what you learn with a client or colleague.

ESG Investing
ESG Investing Goes Under the Microscope in CalPERS Debate
In a series of sharply written, dueling reports, experts from the American Council for Capital Formation and CalPERS debate the proper role of environmentally and socially conscious investments—and whether the massive public pension fund has grown too political in its actions. Read more >
A Passionate Defense of ESG Investing from Connecticut Treasurer
While the investing rules controlling the Connecticut public pension fund are different from those governing corporate retirement plans, the argumentation as to why gun manufacturer divestment may be the right thing to do offers some food for thought for anyone charged with the fiduciary management of retirement plan assets. Read more >
Institutional ESG Investing Can Bring Tough Reporting Questions
Highlights from a new Natixis survey suggest reporting challenges continue to rank as top hurdle for institutions implementing ESG programs; this includes the concern that public companies may be “greenwashing” reported data to enhance their public image. Read more >
P-Solve Report Questions Some Common TDF Manager Practices
“While appropriate for some participants, heavy reliance on equities is almost certainly not suitable for as many 401(k) participants as the allocation of the largest TDF managers suggests,” P-Solve argues. “TDFs are built mainly for favorable economic and market environments.” Read more >
LPL Researchers Perspectives on Managing Interest Rate Risks
Researchers expect yields to grind gradually higher during the year, but not in a straight line. As such, they continue to recommend portfolio positioning with a duration (a measure of interest rate sensitivity) lower than the Bloomberg Barclays U.S. Aggregate Index, along with additional diversification across sectors, maturities, and credit ratings (for suitable investors), which may potentially help mitigate the impact of rising interest rates on investors’ portfolios. Read more >
Embrace of Passive Funds Is Not What It Appears To Be
In conversation with Jeff Kletti, head of investments at Wells Fargo Institutional Retirement and Trust, PLANADVISER gets an inside view of some emerging—and some familiar—defined contribution plan trends. Read more >
FINRA Rep Monitoring Rule Change Could Trigger RIA Compensation Renegotiation
The regulator is reassessing its requirements for RIAs to monitor the outside business activities of their reps; one experts argues it is likely that, if the final rule reflects the proposed rule, many plan advisers who serve plans through an independent RIA (as opposed to the broker/dealer’s “corporate” RIA) will seek to renegotiate their compensation arrangements relating to their independent RIA revenue. Read more >
Nearly Three-Quarters of Boomers Want to Delay Retirement

More than three in 10 have no retirement budget.

Will SCOTUS Decide the Fate of the DOL Fiduciary Rule?

Some ERISA attorneys argue the Fifth Circuit decision last week to vacate entirely the DOL’s fiduciary rule expansion makes a Supreme Court decision on the matter inevitable; others are less sure that a decisive SCOTUS decision could be forthcoming, instead expecting the SEC to take the lead; still others admit they have little idea how the regulatory picture will shake out, recommending patience and ongoing compliance.

Confusion Abounds After Fifth Circuit Decision Vacates DOL Fiduciary Rule

The latest decision out of the Fifth U.S. Circuit Court of Appeals throws a dramatic new element of confusion into the epic regulatory saga that has been the rollout of the Department of Labor fiduciary rule.

Many Americans Would Forego Social Security Payments for Student Loan Debt Forgiveness

The Student Security Act of 2017​ would grant $550 in student loan forgiveness for each month a student debtor was willing to raise his or her full retirement age, or $6,600 per year.

Retirement Programs Must Continue to Evolve to Address Participant Needs
Chuck Coldwell, vice president - national director, Consulting and BOLI Services at Pentegra, believes as an industry, we still have not reached the goal of getting the majority of participants in a good place for retirement—even with auto enroll and escalate.

Editorial: Alison Cooke Mintzer

Advertising: Paul Zampitella

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