PLANSPONSOR - December 2021 - January 2022 - 17
2022 INNOVATION ISSUE | COVER STORY
INTEREST
PIQUED
What
sponsors
may consider
in responding
to participant
demand for
these funds
Art by Craig Frazier
AMONG the defined contribution (DC) plan participants aware of the environmental, social
and governance (ESG) fund options in their plan, nine out of 10 said they invest in them,
according to the 2021 Schroders U.S. Retirement Survey, released in May by global investment
manager Schroders plc.
But not many DC plans currently offer ESG fund options. Overall, 15% of sponsors
responding to the 2021 PLANSPONSOR Defined Contribution Survey reported that their
plan includes an ESG option on the investment menu.
" We do know that participant demand for ESG investing is growing, " says Deb Boyden,
head of U.S. defined contribution at Schroders in San Francisco. " Although there are only a
few ESG options available in DC plans, [the concept] is driving demand from participants. "
Participant Interest
Probably 5% or less of Fidelis Fiduciary Management's clients have an ESG fund on their investment
menu, and, in those cases, the ESG assets tend to be 1% or less of the plan's total, says
David Montgomery, co-founder and president at Fidelis, a OneDigital company, in Tampa,
Florida. He sees several reasons for the low utilization, led by a lack of understanding of ESG
investing at the participant, plan sponsor and plan adviser levels. Second, the Department of
Labor (DOL)'s rules for fiduciaries on incorporating ESG have been in limbo the past few years.
Lastly, Montgomery says, implementation of an ESG strategy takes some work. " ESG is not
one asset class: It's a methodology. It can be any asset class, " he says. He calls " the definition
of what an ESG fund should be doing and the application of ESG factors 'fluid.' Many mutual
funds, even if not specified as ESG funds, are implementing analysis of ESG factors as part of
their investment due diligence-and they're doing it in different ways. "
That ESG funds offered in DC plan lineups have yet to attract much in participant assets
is the norm for menu additions, says Tom Shingler, senior vice president and leader of the
ESG team at investment consultant Callan LLC in Summit, New Jersey. " If you add a new
PLANSPONSOR.COM December 2021 - January 2022 17
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PLANSPONSOR - December 2021 - January 2022
Table of Contents for the Digital Edition of PLANSPONSOR - December 2021 - January 2022
INSIGHTS
RULES & REGULATIONS
UPFRONT
ESG Interest Piqued
2021 Best in Class DC Providers
Ramping Up Offerings
Annuities Still Misunderstood
Student Loan Repayment
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover1
PLANSPONSOR - December 2021 - January 2022 - Cover2
PLANSPONSOR - December 2021 - January 2022 - 1
PLANSPONSOR - December 2021 - January 2022 - 2
PLANSPONSOR - December 2021 - January 2022 - 3
PLANSPONSOR - December 2021 - January 2022 - INSIGHTS
PLANSPONSOR - December 2021 - January 2022 - 5
PLANSPONSOR - December 2021 - January 2022 - RULES & REGULATIONS
PLANSPONSOR - December 2021 - January 2022 - 7
PLANSPONSOR - December 2021 - January 2022 - 8
PLANSPONSOR - December 2021 - January 2022 - 9
PLANSPONSOR - December 2021 - January 2022 - UPFRONT
PLANSPONSOR - December 2021 - January 2022 - 11
PLANSPONSOR - December 2021 - January 2022 - 12
PLANSPONSOR - December 2021 - January 2022 - 13
PLANSPONSOR - December 2021 - January 2022 - 14
PLANSPONSOR - December 2021 - January 2022 - 15
PLANSPONSOR - December 2021 - January 2022 - ESG Interest Piqued
PLANSPONSOR - December 2021 - January 2022 - 17
PLANSPONSOR - December 2021 - January 2022 - 18
PLANSPONSOR - December 2021 - January 2022 - 19
PLANSPONSOR - December 2021 - January 2022 - 2021 Best in Class DC Providers
PLANSPONSOR - December 2021 - January 2022 - 21
PLANSPONSOR - December 2021 - January 2022 - 22
PLANSPONSOR - December 2021 - January 2022 - 23
PLANSPONSOR - December 2021 - January 2022 - 24
PLANSPONSOR - December 2021 - January 2022 - 25
PLANSPONSOR - December 2021 - January 2022 - 26
PLANSPONSOR - December 2021 - January 2022 - 27
PLANSPONSOR - December 2021 - January 2022 - 28
PLANSPONSOR - December 2021 - January 2022 - 29
PLANSPONSOR - December 2021 - January 2022 - Ramping Up Offerings
PLANSPONSOR - December 2021 - January 2022 - 31
PLANSPONSOR - December 2021 - January 2022 - 32
PLANSPONSOR - December 2021 - January 2022 - 33
PLANSPONSOR - December 2021 - January 2022 - Annuities Still Misunderstood
PLANSPONSOR - December 2021 - January 2022 - 35
PLANSPONSOR - December 2021 - January 2022 - Student Loan Repayment
PLANSPONSOR - December 2021 - January 2022 - 37
PLANSPONSOR - December 2021 - January 2022 - FIDUCIARY FORUM
PLANSPONSOR - December 2021 - January 2022 - INSIDE ANGLE
PLANSPONSOR - December 2021 - January 2022 - PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover3
PLANSPONSOR - December 2021 - January 2022 - Cover4
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