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3 days ago
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Labor Dept. drops Biden-era ESG fiduciary rule
This story was originally published on ESG Dive. To receive daily news and insights, subscribe to our free daily ESG Dive newsletter. The Department of Labor informed the Fifth Circuit Court of Appeals Wednesday that it will abandon the Biden administration's rule allowing pension plan fiduciaries to consider ESG factors and other 'collateral benefits' in tiebreaker situations, according to court documents. A lawyer with the Department of Justice's civil division appellate staff said in a letter that 'the Department has determined that it will engage in a new rulemaking on the subject of the challenged rule.' The new rulemaking process will be included in the Trump administration's spring regulatory agenda, according to the May 28 letter. The Biden administration's rule was challenged by a coalition of 26 Republican-led states, though had thus far held up in the face of litigation. The Labor Department asked for a temporary pause in the legal proceedings last month as it weighed rescinding the rule. A judge granted a 30-day pause, directing the agency to provide an update on what further actions it planned to take, with Wednesday's filing representing the government's response. The Biden administration's Labor Department finalized the rule, 'Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,' in 2022, and it has been in effect since January 2023. At the time, the agency said the rule overturned guidance from the first Trump administration which had a 'chilling effect' on fiduciaries. The rule allowed retirement plan fiduciaries to consider ESG and other collateral benefits to break a tie when two or more investments 'equally serve' the financial interests of the plan and it would be imprudent to invest in both or all options. The Republican-led states leading the lawsuit have argued that the rule runs afoul of the Employment Retirement Income Security Act of 1974. However, a federal district court judge has twice ruled that the rule was permissible. Texas Northern District Court Judge Matthew Kacsmaryk first dismissed the lawsuit in September 2023, though that ruling relied on the now-overturned Chevron doctrine. After hearing arguments in the case, the Fifth Circuit later remanded the case back to Kacsmaryk for a ruling in light of that change. Kacsmaryk again ruled that the rule does not violate ERISA in February. While the planned timeline for a new rule proposal will be unknown until the administration releases its regulatory agenda, the May 28 court filing said the Department of Labor 'intends to move through the rulemaking process as expeditiously as possible.' Recommended Reading State of the Labor Dept. ESG rule in a post-Chevron landscape Sign in to access your portfolio
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3 days ago
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Memphis Job Corps paused by Dept. of Labor, congressman says
MEMPHIS, Tenn. — Memphis's Job Corps program is reportedly one of the programs put on pause by the Trump Administration. Congressman Steve Cohen announced on Friday that the program at the Benjamin L. Hooks Job Corps Center has ended after the Trump Administration paused operations at Job Corps centers across the country. 'I find it difficult to express my dismay at the Ben Hooks Job Center being closed summarily and seeing the students sent home without notice,' Cohen said in a statement. 'If there was a problem at the center, or at the centers like it nationally, the Department should have attempted to fix them, but instead of working with the contractors and helping students, they've just decided to send the students home.' Midtown Memphis dairy plant announces immediate closure The Department of Labor announced the pause on Thursday. The department says the decision 'follows an internal review of the program's outcome and structure and will be carried out in accordance with available funding, the statutory framework established under the Workforce Innovation and Opportunity Act, and congressional notification requirements.' Cohen calls the pause a 'careless approach' and places blame on the cost-cutting on Trump and Elon Musk's Department of Government Efficiency, commonly known as DOGE. 'The Department of Labor apparently has no plans for an improved product or a new approach,' Cohen said. 'This careless approach will upset the lives of too many ambitious members of a future workforce, and should be condemned. DOGE had recommendations for the Department of Labor, and I suspect this is a product of its chainsaw work.' The Benjamin L. Hooks Job Corps Center is located on McAlister Drive in Whitehaven. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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3 days ago
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Want a Crypto 401(k)? The DOL Isn't Standing in the Way Anymore
The Department of Labor is getting out of crypto's way in 401(k) plans. The agency on Wednesday changed its tune about bitcoin and any other digital asset being included in employer-sponsored retirement plans. It rescinded guidance from 2022 that directed plan fiduciaries to use 'extreme care' when considering crypto. While that didn't forbid digital assets in 401(k)s, it didn't exactly help the cause. Now, the DOL says it is taking a neutral stance on crypto. The Employee Retirement Income Security Act 'does not prohibit any types of investments,' said Fred Reish, partner at law firm Faegre Drinker Biddle & Reath. 'The prior guidance didn't say that crypto investments were prohibited, but conveyed that it was dangerous for fiduciaries to allow crypto investments in a plan's core lineup or even in a brokerage window. That had a chilling effect on plan sponsors.' READ ALSO: Why Thrivent Wants to Hire Nearly 600 Advisors this Year and ETFs Unfazed by Market Volatility Options for including crypto to any extent in 401(k)s are thin. That may change, but plan sponsors are often hesitant to do anything with their investment menus that makes them stand out in any way. And that's not just for fear of regulators — there has been no shortage of class-action lawsuits involving 401(k)s and their investments. 'The majority of plan sponsors would never consider adding crypto into a retirement account anyway. That's the good news,' said Knut Rostad, president of the Institute for the Fiduciary Standard. 'The bad news is that this has been a clear message that the proponents can use for pushing crypto into these accounts in situations where the advisor is uncertain about whether he or she should do it. It's exchanging a yellow caution light, which we had before, with a green.' There are a few existing options for retirement accounts: ForUsAll, a consultant and record keeper, added a 401(k) feature in 2021 that allows workers to allocate up to 5% of assets and contributions to various digital assets through Coinbase Institutional. That firm did not immediately respond to a request for comment about the uptake within 401(k)s. Fidelity for several years has offered workers within its own company plan access to a bitcoin fund. The company, which this year rolled out crypto investing for IRAs, also did not immediately provide comments. A Case for Advisors. As popular as crypto has become, it's likely that many people on 401(k) investment committees haven't held or invested in it. That can be a problem, because the law requires fiduciaries to be competent and knowledgeable about the investments they select, Reish said. 'However, that 'deficiency' can be cured by the use of a knowledgeable consultant or adviser,' he said. Even so, any plans that opt for digital assets may limit the exposure to an allocation product or service, such as a target date fund or managed account, he said. 'On the other hand, plan fiduciaries may allow crypto investments to be included in their plans' brokerage windows.' This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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3 days ago
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Labor Department to shutter Job Corps centers, including two in Georgia
Secretary of Labor Lori Chavez-DeRemer stands behind President Donald Trump after he signs executive orders in the Oval Office on April 23, 2025. Secretary of Commerce Howard Lutnick and Secretary of Education Linda McMahon look on. (Photo by) Job Corps centers in Albany and Brunswick are set to shut their doors by June 30 after the U.S. Department of Labor announced plans to suspend operations at nearly 100 locations nationwide. The Job Corps program dates back to 1964 and was created as part of President Lyndon B. Johnson's 'War on Poverty.' The program, which claims to be 'the largest nationwide residential career training program in the country,' works by providing low-income students ages 16 to 24 with housing, education, career training and employment assistance, primarily in industries like manufacturing, construction and health care. However, the program encountered serious hurdles during the COVID-19 pandemic, and currently faces a $140 million budget deficit that Department of Labor officials estimate could grow to $213 million by next year. The federal agency cited a report from April highlighting metrics like the average annual cost per student, average total costs per graduate and total violent crime rates. 'Job Corps was created to help young adults build a pathway to a better life through education, training, and community,' U.S. Labor Secretary Lori Chavez-DeRemer said in a statement. 'However, a startling number of serious incident reports and our in-depth fiscal analysis reveal the program is no longer achieving the intended outcomes that students deserve.' In total, 99 centers that are run by contract agencies will be forced to close should the plan take effect. An additional 24 centers owned and operated by the U.S. Department of Agriculture will not be affected by the closures. Atlanta is home to the program's Region 3 office, overseeing centers across Georgia, Alabama, Florida, Mississippi, North Carolina, South Carolina and Tennessee. The Department of Labor said it plans to arrange transportation back home for roughly 25,000 currently enrolled students, and to connect them with other educational and employment resources. It is unclear how many students across Georgia will be affected. Calls to the Atlanta-based Jobs Corps office were not answered and emails sent to two top officials received a bounce back message. Lawmakers in Congress were quick to push back against the sudden closures, citing a long history of bipartisan support for the program. 'The Job Corps program is the embodiment of a hand up and not a handout,' said U.S. Rep. Sanford Bishop, an Albany Democrat who co-chairs the bipartisan Congressional Job Corps Caucus. 'It provides workforce skills and training that empower participants to become self-sufficient and productive citizens. Today's foolish action by the White House and the United States Department of Labor to close the Job Corps program will shatter the dreams and aspirations of tens of thousands of promising students.' Critics of the closures, including the National Job Corps Association, have also argued that the data used to compile the report is misleading, since it focuses solely on metrics from 2023, a year when the program was still struggling to recover from pandemic-era hurdles that lowered enrollment and graduation numbers. Notably, this is not the first time President Donald Trump's administration has targeted the Job Corps program for closures. Sonny Purdue, the former Georgia governor who later served as Agriculture Secretary in the first Trump Administration and is now the chancellor of the Georgia Board of Regents, also attempted to shutter nine Job Corps centers and transfer an additional 16 centers to private contractors back in 2019. However, he quickly dropped the bid after encountering fierce congressional pushback — including from then-Senate Majority Leader Mitch McConnell. SUPPORT: YOU MAKE OUR WORK POSSIBLE
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Job Corps Center in Chicopee to close as part of federal cuts
CHICOPEE, Mass. (WWLP) – The U.S. Department of Labor and the Trump administration announced that they will pause operations at Job Corps centers nationwide, including in Chicopee. Chicopee electrical fire prompts reminder of smoke detector importance This comes after major cuts to the federal government. The Department of Labor said in a press release that the pause of all centers will happen by June 30th. The program has been operating at a $140 million deficit since fiscal year 2024. The deficit is projected to reach $213 million in fiscal year 2025. The Department of Labor states that they are collaborating with state and local workforce partners to assist current students in advancing their training and connecting them with education and employment opportunities. 'As Senate Chair of the Joint Committee on Labor and Workforce Development, I am deeply troubled by the Trump Administration and the U.S. Department of Labor's decision to close Job Corps centers across the country, including the vital site in Chicopee. This abrupt move not only jeopardizes the futures of students who depend on Job Corps for hands-on career training and economic opportunity but also threatens the livelihoods of dedicated staff who support their success. At a time when Massachusetts and the nation face a growing need for skilled workers, closing these centers is a step in the wrong direction. It undermines efforts to build a stronger, more inclusive workforce and leaves vulnerable communities behind. My office is actively assessing the full impact of this decision and remains in close contact with state and federal partners to demand answers and advocate for all those affected.' State Senator Jake Oliveira 'Job Corps was created to help young adults build a pathway to a better life through education, training, and community, however, a startling number of serious incident reports and our in-depth fiscal analysis reveal the program is no longer achieving the intended outcomes that students deserve. We remain committed to ensuring all participants are supported through this transition and connected with the resources they need to succeed as we evaluate the program's possibilities.' Secretary Lori Chavez-DeRemer WWLP-22News, an NBC affiliate, began broadcasting in March 1953 to provide local news, network, syndicated, and local programming to western Massachusetts. Watch the 22News Digital Edition weekdays at 4 p.m. on Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
