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What Does the ESG Rule Say About Participant Preferences? Tim Hauser

Practice Management

Does a plan sponsor violate a duty of loyalty when considering retirement plan participant preferences? 

Here’s what Tim Hauser, Deputy Assistant Secretary for Program Operations of the Employee Benefits Security Administration (EBSA), had to say. 

“We added a provision that expressly says the duty of loyalty isn’t violated just because you take into account participant preferences,” Hauser told American Retirement Association CEO Brian Graff. “While ERISA does have an exclusive purpose rule, it’s not inconsistent with that rule to take into account participant preferences.”

Entitled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” — a.k.a. the “ESG rule” — it went into effect on Jan. 30. Graff recently sat down with Hauser to explore its implications. 

The full interview can be found here