To What Does the DOL’s Proposed Framework for Plan Investment Fiduciaries Apply?

Q: I was informed by the recordkeeper for our 403(b) plan that the Department of Labor recently released guidance regarding alternative investments. If we currently have no alts in our plan and do not plan on having any, should I care about that guidance at all?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

A:  Your recordkeeper is correct. The Department of Labor recently released “Fiduciary Duties in Selecting Designated Investment Alternatives.” This proposed rule was drafted in response to Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors.” Although the Executive Order focused on expanding access to private equity, private credit, and other alternative assets, the DOL drafted this new rule to be asset-class neutral. Consequently, the prudence standards articulated in the proposed rule apply to the selection of any designated investment alternative.

The proposed rule aims to clarify the broader fiduciary framework under ERISA Section 404(a) by introducing an optional process-based safe harbor. Under this framework, a fiduciary’s decision-making is presumed prudent if they evaluate a potential investment through the lens of six core factors: performance, fees, liquidity, valuation, benchmarking, and complexity.

The public comment period remains open through June 1, 2026.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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