DOL changes mind on private equity investments

The Department of Labor (DOL) ‘clarified’ a 2020 DOL letter on private equity investments in defined contribution plans. 

“After considering reactions to the Information Letter by stakeholders, the department concluded it was important to release a statement cautioning fiduciaries, especially in small plans, against marketing efforts that may misrepresent the Information Letter as a U.S. Department of Labor endorsement or recommendation of these investments for 401(k) plans,” wrote Acting Assistant Secretary for Employee Benefits Security Ali Khawar in the statement.

The DOL advised in their statement that except in a minority of situations, plan-level fiduciaries of small, individual account plans are not likely suited to evaluate the use of PE investments in designated investment alternatives (DIAs) in individual account plans.

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