FAQ

Will the Addition of a Renewable Energy Fund Meet Fiduciary Standards?

Renewable Energy Funds are a more aggressive investment and fall in the same category as Real Estate Funds and Technology Funds which are common in 401(k) and 403(b) plans.


Employee education is important when adding a Renewable Energy Fund to encourage portfolio diversification, and only having a portion of assets in the new fund.


As well it is important to note that under ERISA, the federal law that governs 401(k), 403(b) and other defined contribution plans, only economic reasons can be considered when adding a fund to a plan. Hence, it is important cite the rapid growth experienced world wide by the renewable sector and potential for returns rather than social or environmental benefits.


We recommend that you start by requesting a Renewable Fund Addition from your current Financial Advisor or Plan Provider.


However, Renewable Energy Funds are new to many Financial Advisors and Plan Providers, leaving them uncomfortable in a changing world.


If your current Financial Advisor or Plan Provider can't provide you with a well performing Renewable Energy Fund, don't hesitate to contact us for a recommendation on Financial Advisors and Plan Providers who are well experienced in adding Renewable Energy Funds to 401(k)s and IRAs.


Excerpt from the Mercer SRI Guide for DC Plan Sponsorships:

"Regulators have also weighed in on the implications of the Employment Retirement Income Security Act (ERISA) regarding SRI. In 1998, Calvert sought an opinion on the application of ERISA to an SRI option as part of a retirement plan. The response from the Office of Regulations and Interpretations reads, in part:

... The fiduciary standards of sections 403 and 404 do not preclude consideration of collateral benefits, such as those offered by a ‘socially responsible’ fund in a fiduciary’s evaluation of a particular investment opportunity . . .

The same standards set forth in sections 403 and 404 of ERISA governing a fiduciary’s investment decision, discussed above, apply to a fiduciary’s selection of a ‘socially responsible’ mutual fund as a plan investment or, in the case of an ERISA section 404(c) plan, a designated investment alternative under the plan. Accordingly, if the above requirements are met, the selection of a ‘socially responsible’ mutual fund as either a plan investment or a designated investment alterative for an ERISA 404(c) plan, would not, in itself, be inconsistent with the fiduciary standards set forth in sections 403(c) and 404(a)(1) of ERISA."
How Interested Are Employees In Having a Renewable Energy Fund in the 401(k) Plan?

An informal survey at a 500 employee leading U.S. national property management firm, indicates that 87% of employees would like to have a renewable energy fund added to the 401(k) plan and that 77% would be likely to invest in the fund. This is consistent with a national poll indicating that 89% of American want to see increased wind energy production.

An interesting note is that 100% of employees surveyed believe our company could reap significant positive media publicity and win corporate leadership awards by being one of the first companies to add a renewable energy fund to the employee 401(k) plan.

This is consistent with a national poll indicating that 89% of American want to see increased wind energy production.


Soon it will be commonplace for companies to offer Renewable Energy Funds in 401(k) plans.


Add a Renewable Energy Fund today and you'll be able benefit from valuable media coverage as a corporate clean energy leader!

Are Renewable Energy Funds Too New to Invest in?

The asset management firms that offer renewable energy funds have a proven track record of fund management ranging from 8 years (Guinness-Atkinson) to 30 years (Calvert).

More information on renewable energy funds that can be added to 401(k) plans is available at the Renewable Funds page

Length of fund existence is not a guarantee of future performance. Financial firms and automotive firms with track records of more than 80 years have experienced financial hard times and poor earnings results.

Additionally, the incoming federal administration is making renewable energy a key part of the nation’s energy plan. President Barak Obama's comments on renewable energy can be viewed at: Presidential Comments on Renewable Energy