Wednesday, November 2, 2016
Edward Zelinsky (Cardozo) has just published in Cardozo Law Review's De Novo The Continuing Battle over Economically Targeted Investments: An Analysis of the Department of Labor's Interpretive Bulletin 2015-01. Here's an excerpt:
In Interpretive Bulletin 2015-01 (IB 2015-01), the U.S. Department of Labor (DOL) renewed the now two-decades old battle over “economically targeted investments” (ETIs). As a matter of statutory interpretation, IB 2015-01, like its predecessors, is unpersuasive. [ERISA] requires plan trustees to invest “solely” to provide participants’ retirement benefits. A trustee who invests in ETIs violates this statutory obligation by pursuing collateral economic benefits for persons other than plan participants. As a matter of policy, the social investing which ETIs exemplify is unsound. At best, such social investing in practice merely shuffles investment ownership without altering market-based allocations of capital.