IAA’s Active Managers Council Provides Plan Fiduciaries with Guidance on Investment Selection and ESG under New DOL Rule
Washington, D.C.,- December 14, 2022— The Investment Adviser Association’s Active Managers Council has published a new research paper designed to be an updated resource for plan fiduciaries and give them a general understanding of their legal responsibilities. Defined Contribution Plan Fiduciaries and Investment Selection: Overview of the Legal Context is the first summary for plan fiduciaries that incorporates the latest Department of Labor (DOL) regulation on investment selection.
“The new DOL rule provides important clarity on how plan fiduciaries can take participant preferences and ESG considerations into account when they make investment selections,” said Karen Barr, Investment Adviser Association President & CEO.
The new paper summarizes at a high level the principles governing the exercise of fiduciary responsibility in 50 years of law, regulation, regulatory guidance, and court decisions through the DOL’s most recent rule on prudence and loyalty in selecting plan investments.
This summary includes discussions of:
- The core principles of the ERISA fiduciary framework
- The key components of the plan fiduciary’s role in investment selection
- The elements of the due diligence process
- The importance of costs
- Special considerations related to ESG, default options, target date funds, and cryptocurrencies
“The job of the plan fiduciary isn’t easy because there’s no one investment approach that’s right for every plan. Fortunately, they have the flexibility to consider a wide range of alternatives as long as they focus on the best interests of participants,” said Barr.
About the Active Managers Council:
The IAA formed the Active Managers Council to foster education and thought leadership regarding active management, curate and sponsor research on active and passive management, and engage on relevant public policy issues. The Council’s member firms represent diverse viewpoints, business models and types of investors.
The Active Managers Council offers a robust library of research, commentary and investing insights designed to help investors make informed decisions for investment planning and portfolio construction.
About the IAA:
The Investment Adviser Association (IAA) is the leading trade association representing the interests of fiduciary investment advisers. The IAA’s member firms collectively manage more than $35 trillion in assets for a wide variety of institutional and individual investors.
In addition to serving as the voice of the advisory profession on Capitol Hill and before the SEC, DOL, CFTC, and other U.S. and international regulators, the IAA provides extensive practical and educational resources to its membership. For more information, visit www.investmentadviser.org or follow us on LinkedIn, Twitter, and YouTube.