Catholic 401(k) MEP will screen funds for morality

investmentnews.com:

A Catholic values group plans to launch a multiple employer 401(k) plan this month that is compliant with the church’s teachings.

That group, the Catholic Benefits Association, started 10 years ago with the mission of helping employers get exemptions from provisions of the Affordable Care Act, such as having to provide access to contraceptives and reproductive services as part of their health care plans. Now, its CEO says, it wants to help church-affiliated and for-profit companies avoid exposure in their retirement plans to investments that Catholics might find objectionable.

Although church retirement plans are carved out from having to comply with the Employee Retirement Income Security Act, that’s not the case for 401(k)s, including the MEP that the Catholic Benefits Association is adding. While the Department of Labor has indicated for years that 401(k)s can include investments based in part on nonfinancial factors, the regulator’s recently passed rule – Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights – clarified the requirements on using environmental, social and governance criteria.

“I’m a big believer in saving for retirement,” said Doug Wilson, CEO of the Catholic Benefits Association. “I looked at my young employees and thought they needed a vehicle to plan a little better than some of us did back in the day … I was surprised at how hard it was to get that done.”

After struggling to start a 401(k) for the group that only included church-compliant investment options, Wilson said the organization wanted to make a retirement plan option available to its members, which include about 1,500 Catholic schools, religious orders and other affiliates. For-profit groups can be members