Season 6 Episode 4 (click here)
On March 30, the Employee Benefit Security Administration (EBSA) published its much-anticipated response to President Trump’s Executive Order on Alternative Investments. What, if anything, does it mean?
In this episode Nevin (Adams) and Fred (Reish) look at the proposal—what it says (and doesn’t), the six factors to be considered—and one that isn’t—the process ahead, and its implications for plan fiduciaries.
Last August President Trump signed an executive order directing the Secretary of Labor to, among other things, “reexamine the Department of Labor’s guidance on a fiduciary’s duties regarding alternative asset investments in ERISA-governed 401(k) and other defined-contribution plans”—a stance widely seen as encouraging the consideration of alternative assets in defined contribution plans, including 401(k)s and 403(b)s.
In response, on March 30 the Labor Department issued a proposed regulation to that directive titled “Fiduciary Duties In Selecting Designated Investment Alternatives.” However, it acknowledges that while the executive order “focused on fiduciary responsibilities for offering an asset allocation fund that includes investments in alternative assets, the proposed regulation would apply to the selection of any type of investment as a designated investment alternative, including investments in so-called “alternative assets.”
The Investment Selection proposal also has a lot to say about ERISA litigation. In fact, the word is used over 100 times in the release, including 26 footnotes and multiple section headers.
Episode Resources:
Special Edition: Fiduciary Duties In Selecting Designated Investment Alternatives Proposed Rule https://endeavor-retirement.activehosted.com/index.php?action=social&chash=f770b62bc8f42a0b66751fe636fc6eb0.467&s=f1b8e69fc34995b9d807df36b7a3c6f3
EBSA’s Aronowitz Outlines Fiduciary Framework for ‘Investment Selection Rule’
How Many Times Does the DOL Proposed Rule Mention ‘Litigation?’
Fiduciary Duties in Selecting Designated Investment Alternatives (the “Investment Selection Rule”)
Breaking News: Trump Signs EO to Advance Private Market Investments in 401(k)s