Citi Blazes New ESG Trails in Boosting Diverse 401(k) Managers

Multinational investment bank Citigroup Inc. has found a novel way to use its own worker retirement plans to achieve racial diversity objectives without running afoul of strict federal benefits laws.

The Biden administration’s chief worker benefits regulator granted Citi a rare advisory opinion (Advisory Op. 2023-01A) last week, the agency’s first since January 2020.

It paves a “groundbreaking” path for the company to prioritize diverse asset managers to oversee its workers’ 401(k)s, said Dominic DeMatties, a Thompson Hine LLP partner who requested the department’s input on behalf of Citi.

Regulators are already facing criticism ...