PLANSPONSOR - June - July 2022 - 7

that the SEC is the appropriate regulator
to be addressing this issue, others see the
ambitious regulatory package proposed
earlier this year as a step beyond the agency's
traditional purview.
The Investment Consultants Sustainability
Working Group - United States,
a collaboration among 17 investment
consulting firms including Aon, Callan,
Cambridge Associates, Meketa Investment
Group, Mercer, NEPC, Russell
Investments, Versus and WTW, submitted
comments supporting the proposed rule.
The ICSWG-US said it believes the
proposed rule " can help ensure that investors
have access to consistent, comparable,
reliable and decision-useful information
on financially material risks and opportunities
related to climate change. "
The comment continues: " In the
of
absence
standardized
disclosures,
investors seeking climate-related information
collect this data from numerous
sources, including companies' voluntary
disclosures that are unverified and often
difficult to compare, and rely on thirdparty
estimates in the absence of reported
data, " which is a burden on debt and
equity issuers and results in market inefficiencies,
the organization wrote.
They also said it is important that the
proposed rule is based on the Task Force
on Climate Related Financial Disclosures
and the Greenhouse Gas Protocol, of
the Financial Stability Board, because it
will align with global standards on such
disclosures.
Alternatively, the American Securities
Association, which represents wealth
management and capital markets interests
of regional financial services firms,
said it opposes the proposed rule because
it " represents a dramatic and unwarranted
turn away from this regime. The
Commission is proposing to adopt
a
prescriptive approach to disclosures-
one that mandates numerous disclosures
the Commission alleges will protect the
environment, not investors. "
The ASA's comment letter outlines
how that body believes the proposed rule:
1) " exceeds the Commission's statutory
authority, 2) is arbitrary and capricious,
and 3) raises serious First Amendment
concerns. As a result, the ASA urges
the Commission to drop this rule and
refrain from fundamentally transforming
the securities laws in this way without
express Congressional authorization. "
Is the DOL Overstepping?
A cryptocurrency conflict has erupted
between the Department of Labor and
ForUsAll,
a
retirement
investment
platform for small businesses. In the
complaint, ForUsAll claims the DOL is
violating the Administrative Procedure
Act with a compliance bulletin on cryptocurrency
in 401(k) plans. The complaint
argues that the DOL's March 10 compliance
bulletin on cryptocurrency should
be vacated, and the plaintiff seeks related
declaratory, injunctive and other relief.
The DOL's March compliance bulletin
" cautions plan fiduciaries to exercise
extreme care before they consider adding
a cryptocurrency option to a 401(k) plan's
investment menu for plan participants. "
The ForUsAll complaint challenges
the DOL's approach to cryptocurrency in
401(k)s. Plaintiffs blast the bulletin as an
" arbitrary and capricious attempt " to limit
the use of cryptocurrency in defined contribution
plans and charge that the department
overstepped its authority under the
Employee Retirement Income Security Act
and disregarded the notice and comment
process required under the APA.
The DOL did not return a request for
comment on the lawsuit.
Automatic 401(k) Transfers
New legislation known as the Advancing
Auto-Portability Act of 2022 was introduced
by Senators Tim Scott, R-South
Carolina, and Sherrod Brown, D-Ohio.
According to a statement from the senators,
the legislation would cut through
red tape to help Americans who change
jobs frequently increase their retirement
savings. The legislation would allow
workers' 401(k) savings accounts to be
automatically rolled over from a previous
employer to a new employer.
Scott said, in a press release, " Making
it easier for workers to build savings will
alleviate stress for families and ensure
every person has the opportunity to retire
with dignity, regardless of their income or
economic status. "
Severe leakage often occurs when
workers move to a new employer, particularly
when they have only a small
account. They then must completely start
over when it comes to saving for retirement,
said Spencer Williams, Retirement
Clearinghouse founder, president and
CEO, in a statement. He noted that, by
using technology to save both time and
resources, automatic portability could be
a powerful way to stem plan leakage.
" 401(k) savings portability will institute
a new default in plan designs, which
will [require] participants to opt out of
having their small balances automatically
moved to their new employers' plans
when they change jobs, instead of having
to opt in, " Williams said. " Senators Scott
and Brown have crafted legislation that
would make this default available to all
plans across the U.S. retirement system-
a huge win for America's hardworking
retirement-savers. " -PS
For in-depth coverage of these topics and more, go to PLANSPONSOR.com/compliance.
http://www.PLANSPONSOR.com/compliance
PLANSPONSOR - June - July 2022

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