Primary courses of action, in Dalbar’s revised proposal, are defined as:

- Participation in a plan that makes the economic value possible.
- Contributions to the plan that provide the initial capital.
- Investment choices that seek to increase the initial capital.

Advisors should be able to select investments because of “the measurable financial merits of plan participation and plan contribution” to be permitted, Dalbar President & CEO Louis Harvey said in the company’s comment letter.

“It becomes incumbent on fiduciaries to establish the economic rationale for inclusion of ESG investments. These include practices and targets for increased participation and contribution that are expected to be achieved by the inclusion of ESG investments,” Harvey said.

Participation and contributions are essential “to maximizing the funds available to pay retirement benefits,” he added.

In 2020 Dalbar launched a certification initiative to enhance the effectiveness of retirement plans by establishing standards that reflect both ERISA and ESG practices. “This Dalbar initiative differs greatly from the ESG investments that are the subject of the Proposed Regulation since the Dalbar certification is based on the overall success of the plan in achieving retirement security for the maximum number of employees. We intend to certify plans that meet these standards and thus encourage responsible plan fiduciaries to enhance their plans by managing costs, providing greater benefits to participants, and adopting high standards of governance,” Harvey added.

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