Los Angeles partner Heather Abrigo and Chicago associate Josh Waldbeser co-authored an article for the Journal of Pension Benefits titled “Considering Socially Responsible Funds as 401(k) Investment Options: Managing Fiduciary Risk.”
Heather and Josh discuss “socially responsible” investments and the challenges they often present for plan sponsors and other fiduciaries. They say that creating opportunities for social investments within a 401(k) plan as part of a prudent and deliberative process should not lead to actual liability. They note, however, that there is no guarantee that offering socially responsible investments will not increase the risk of a lawsuit or enforcement action.
The article outlines the requirements and standards of conduct associated with social investments, as well as strategies to reduce risk and protect participants’ interests.