Groom principal and chair of the firm’s Retirement Services group, Michael Kreps, was quoted in the National Association of Plan Advisors (“NAPA”) article, “‘America First Investment Policy’ Calls for Updated Fiduciary Standards,” where he discussed the policy’s implications for ERISA-governed retirement plans and the challenges fiduciaries may face in balancing national security concerns with their obligations under existing investment standards.
According to NAPA, Kreps said that “this ‘language is unusual as it refers to foreign ‘contributions,’ but they might just mean investments.’”
He continued, “If that’s the case, I would think their goal would be to say plans can — or perhaps should — restrict investments in companies that pose a national security risk. The challenge is that plan fiduciaries must first and foremost consider pecuniary factors when making investment decisions, and national security considerations may not always be pecuniary.”
NAPA further reported that Kreps said that “This is not dissimilar to the consideration of environmental factors because they are also ‘economically relevant in some cases and not others.’”
“The interesting part of the policy is the direction to DOL to issue ERISA guidance. There is tension between allowing or requiring plans to restrict legal investments for national security reasons and efforts to restrict ESG investing,” he added.
To read the article, click here.
