NAPA Net - Polling Places 071020 Survey

The Labor Department has the industry all abuzz about ESG (environmental, societal, governance) investments – this week we’d like to know if they’ve made inroads with your practice.

Late last month, noting its concern “that the growing emphasis on ESG investing may be prompting ERISA plan fiduciaries to make investment decisions for purposes distinct from providing benefits to participants and beneficiaries and defraying reasonable expenses of administering the plan,” the Labor Department proposed a new rule to clarify the standards. Standards, it seems fair to say, that left unamended might be expected to slow interest.

Workable, consistent definitions of ESG remain fluid, and perhaps as a result, the adoption rate among defined contribution plans has been tepid—and the take-up rate among participants even lower. Fewer than 3% of plans offer an ESG option, according to the 62nd annual Plan Sponsor Council of America survey, and less than 0.2% of plan assets have been invested in those options.

In the wake of what is sure to be a bit of controversy, this week we’d like to know about your experience with ESG offerings

Question Title

* 1. What's YOUR take on the Labor Department's recent proposed rule with regard to ESG options on the DC plan menu (please only pick one)?

Makes sense to me.

They're way off base.

Haven't read it.

Haven't decided how I feel about it.

Want to expand on that?

Question Title

* 2. What's YOUR take on the suitability of ESG options on a defined contribution/401(k) plan menu (please only pick one)?

I'm open to the idea, but not really committed.

I'm completely on board!

I've got my doubts.

I think it makes sense as a consideration, but not a controlling consideration.

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* 3. Are you actively recommending ESG options to your plan sponsor clients/prospects?

Yes

Not yet

Only when asked about it.

To some, in selected circumstances.

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* 4. Are your plan sponsor clients/prospects proactively asking about ESG options?

No.

Some are, most aren't.

Yes.

Asking, yes. Acting is another matter.

Care to expand on that?

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* 5. Are your plan sponsor clients/prospects acting on implementing ESG options?

Some are, most aren't.

Many are, but not all.

Yes.

No.

Mostly they seem to be "window shopping.'

Any comments on that?

Question Title

* 6. When the plan(s) you work with add an ESG option, what has, generally speaking, been the participant response?

Modest, but enthusiastic.

Tepid at best.

Very positive

Don't have ESG in any of the plan(s) with which I work.

Any others?

Question Title

* 7. The proposed rule singled out ESG as a QDIA, noting that it “does not believe that investment funds whose objectives include non-pecuniary goals—even if selected by fiduciaries only on the basis of objective risk-return criteria consistent with paragraph (c)(3)—should be the default investment option in an ERISA plan.” What do you think of that?

I haven't given it much/any thought.

Irrelevant since I would never choose an ESG option as a default.

Makes sense to me.

They're WAY off base.

The same criteria should apply to all default option considerations.

Any others?

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* 8. OK, last question; how're you doing (check all that apply today)?

I'm good.

I'm great.

I'm hanging in there.

There are good days & not-so-good days.

What day IS it, anyway?

I'm as good as can be expected.

want to expand on that?

Question Title

* 9. Other comments about ESG, your feelings about ESG, plan sponsor perspectives on ESG, the impact of the Labor Department's FABs on ESG adoption, the impact of the Labor Department's proposed rule on ESG adoption, the enthusiasm (or lack thereof) among participants for the option, the amount of action versus interest in the alternative, or life in general?

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* 10. What is your role working with retirement plans?

Advisor

Provider

TPA

Plan sponsor

Recordkeeper

Wholesaler

Consultant

Other (please specify)

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* 11. What size plans do you PRIMARILY work with?

Under $10 million in assets

$10-$20 million

$20-$50 million

$50-100 million

$100 million - $250 million

$250 million - $500 million

Above $500 million

Other (please specify)

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* 12. Suggestions for future survey questions? Seriously - what would you like to know about/from your fellow NAPA-Net readers? Or what would you like to be asked?

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* 13. All responses are confidential, of course - but just in case you would like a response - or want me to know you responded - or just want to say hi - here's your chance to do so (don't forget your email)!