Investment firm develops Catholic faith-aligned 401(k) plan

By Tyler Arnold

Washington, D.C. Newsroom, Jan 1, 2024 / 07:00 am

A Denver-based investment firm is working with the Catholic Benefits Association to develop a 401(k) retirement plan that filters out stocks that promote behavior in contradiction to Catholic teaching, including abortion drugs, contraceptives, embryonic stem cell research, and pornography.

Innovest Portfolio Solutions is a Catholic investment consulting firm that has more than 300 clients. The Colorado-based Catholic Benefits Association, meanwhile, provides human resources and legal advocacy support to the 83 dioceses and more than 1,300 Catholic for-profit companies and nonprofit organizations that constitute its membership.

Innovest announced the development of the Catholic-compliant Multiple Employer 401(k) Plan (MEP) on Dec. 20. It will be available to for-profit businesses, nonprofits, and other ministries, according to a news release from the company. 

“A MEP allows multiple businesses to participate in a qualified retirement plan,” Rich Todd, the chief executive officer of Innovest, said in a statement. 

“Catholic entities can benefit from economies of scale in pricing and minimize their fiduciary liability,” Todd said. “Furthermore, a MEP removes administrative burdens, which allows employers to focus on running their organizations rather than operating a retirement plan. A MEP can be a great resource, particularly for smaller Catholic businesses and organizations.”

The upcoming plan will comply with the investment guidelines set by the United States Conference of Catholic Bishops (USCCB).

The USCCB’s 2021 Socially Responsible Investment Guidelines emphasize five investment principles for Catholics: protecting human life, promoting human dignity, enhancing the common good, pursuing economic justice, and saving the global common home. The guidelines encourage divesting from stocks that are contrary to those principles.

Some of the stocks from which the bishops encourage divestment include those that support abortion, euthanasia, assisted suicide, in vitro fertilization, transgender drugs, embryonic stem cell research, human cloning, discrimination, human trafficking, contraception, pornography, commercial sexual exploitation, and addictive materials or harmful habitual behaviors, such as games of chance. 

The guidelines promote investments in stocks that support environmental and social responsibility, affordable housing, addressing climate change, good labor standards, reducing arms production, and human rights, among other things.

“In an environment where religious freedom faces increasing challenges, the Catholic Benefits Association stands out in the defense of American Catholic employers, ensuring they can pursue their ministries and businesses in line with their faith,” Doug Wilson, the chief executive officer of the Catholic Benefits Association, said in a statement.