{"id":109209,"date":"2021-03-10T18:44:10","date_gmt":"2021-03-10T18:44:10","guid":{"rendered":"https:\/\/fin2me.com\/?p=109209"},"modified":"2021-03-10T18:44:10","modified_gmt":"2021-03-10T18:44:10","slug":"biden-administration-wont-enforce-trump-era-esg-rule-for-401k-plans","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/biden-administration-wont-enforce-trump-era-esg-rule-for-401k-plans\/","title":{"rendered":"Biden administration won&#x27;t enforce Trump-era ESG rule for 401(k) plans"},"content":{"rendered":"<ul>\n<li>The Biden administration won&#x27;t enforce a Trump-era rule that made it harder to use ESG funds in 401(k) plans, the Labor Department said Wednesday.<\/li>\n<li>The agency is reviewing the rule and may ultimately suspend, revise or rescind it.<\/li>\n<li>The Trump-era measure is inconsistent with a Biden executive order on climate and the environment, the labor bureau said.<\/li>\n<\/ul>\n<p>The Biden administration said Wednesday it won&#x27;t enforce a rule issued by the Trump administration that makes it harder to offer environmental, social and governance \u2014 or ESG \u2014 funds in 401(k) plans.<\/p>\n<p>ESG funds may, for example, invest in energy firms that aren&#x27;t reliant on fossil fuels or in companies that promote racial and gender diversity. Investors poured a record $51 billion into ESG funds last year.<\/p>\n<p>The Trump-era Labor Department rule, issued in 2020, doesn&#x27;t explicitly call out or outright forbid ESG funds in 401(k) plans.<\/p>\n<p>But it may stymie already lackluster uptake by changing requirements for employers to select them as 401(k) investments, according to experts.<\/p>\n<p><strong>More from Personal Finance:<\/strong><br \/>What to know about unemployment benefits in the American Rescue Plan<br \/>New $1,400 stimulus checks could be garnished for unpaid debts<br \/>Covid relief bill changes tax rules midseason<\/p>\n<p>Indeed, the rule has already had a chilling effect on their inclusion, even in circumstances when the rules explicitly allow for their use, Biden&#x27;s Labor Department said Wednesday.<\/p>\n<p>&quot;Accordingly, the Department intends to revisit the rules,&quot; the agency said. Such an action could lead to an eventual pullback or rewrite.<\/p>\n<p>Until such guidance is issued, the Biden labor bureau won&#x27;t enforce the Trump-era rules, the Department said.<\/p>\n<p>The Biden labor bureau&#x27;s views were guided by input from stakeholders like asset managers, labor organizations, plan sponsors, consumer groups, service providers and investment advisors, the agency said.<\/p>\n<h2>Trump ESG rules<\/h2>\n<p>The Trump-era rule requires employers \u2014 who make decisions around 401(k) investments \u2014 to only consider factors like a fund&#x27;s risk and return (rather than characteristics like social or environmental good) when choosing 401(k) funds. Otherwise, employers may invite more legal scrutiny.<\/p>\n<p>The Labor Department also explicitly disallowed employers from automatically enrolling workers into an ESG-focused fund. Automatic enrollment has become an increasingly popular way to nudge workers to invest in a 401(k).<\/p>\n<p>The labor bureau is revisiting the Trump-era rule according to an executive order Biden issued in January, titled &quot;Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.&quot;<\/p>\n<p>That order directs federal agencies to review regulations issued between January 2017 and 2021 that &quot;are or may be inconsistent with, or present obstacles to&quot; administration policies on environment and climate. In such cases, agencies may suspend, revise or rescind the rules, according to the Labor Department.<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/03\/10\/biden-administration-wont-enforce-trump-era-esg-rule-for-401k-plans.html\" target=\"_blank\" rel=\"noopener noreferrer\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Biden administration won&#x27;t enforce a Trump-era rule that made it harder to use ESG funds in 401(k) plans, the Labor Department said Wednesday. The [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":109208,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Biden administration won&#x27;t enforce Trump-era ESG rule for 401(k) plans - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/biden-administration-wont-enforce-trump-era-esg-rule-for-401k-plans\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Biden administration won&#x27;t enforce Trump-era ESG rule for 401(k) plans - Fin2me\" \/>\n<meta property=\"og:description\" content=\"The Biden administration won&#x27;t enforce a Trump-era rule that made it harder to use ESG funds in 401(k) plans, the Labor Department said Wednesday. 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