Over the past few months the Department of Labor has issued three pieces of guidance that are (potentially) significant for plan sponsors and plan fiduciaries. These include final regulations describing new restrictions on the use of environmental, social and governance factors (“ESG”) in the selection of plan investments, an interpretative bulletin) containing new rules for plan fiduciaries with respect to proxy voting, and a class-wide prohibited transaction exemption permitting fiduciaries to receive (otherwise prohibited) forms of compensation--such as commissions. These three pieces of guidance may prove to be significant--if they are ever allowed to go into effect.

The Department of Labor has issued new proposed regulation regarding intended to guide plan fiduciaries seeking to invest in funds that utilize environmental, social and governance (“ESG”) considerations. The proposed regulations identify specific (additional) steps that fiduciaries must take in order to utilize ESG funds and would prohibit use of ESG funds within plan “default” investments.