The Continuing Battle Over Economically Targeted Investments: An Analysis of the Department of Labor's Interpretative Bulletin 2015-01

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. The Employee Retirement Income Security Act of 1974 (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.