401(k)s open to alts
What happened
The DOL proposed a rule and issued a 'safe harbor' that would let 401(k) plan sponsors include private markets and other alternative investments in DC plans, broadening what sponsors can offer and changing due-diligence expectations. (natlawreview.com)
Why it matters
DOL published the proposed rule “Fiduciary Duties in Selecting Designated Investment Alternatives” at the end of March 2026 and opened a public comment docket that closes June 1, 2026 (a 62‑day comment period). (federalregister.gov) The proposal implements Executive Order 14330 issued August 7, 2025 and follows the DOL’s submission of the draft to the White House Office of Management and Budget on January 13, 2026. (whitehouse.gov) The agency says the rule uses a six‑factor, process‑based test—performance, fees, liquidity, valuation, benchmarking, and complexity—that fiduciaries must objectively, thoroughly, and analytically evaluate when selecting designated investment alternatives. (dol.gov) The proposal gives a presumption of prudence to fiduciaries who document an “objective, thorough and analytical” process and it expressly contemplates private market sleeves inside target‑date or asset allocation funds and annuity options with liquidity restrictions. (groom.com) The DOL and rule text call for independent, conflict‑free quarterly valuations for non‑public assets and reference adherence to FASB ASC 820 fair‑value measurement standards. (groom.com) Industry groups and service providers have publicly reacted: asset managers like Empower issued supportive statements, while plan advisers and ERISA counsel have flagged that the key open question is whether the rule will provide meaningful legal clarity for fiduciaries. (marketwatch.com) Plan sponsors are now on a fixed timetable—submit comments by June 1, 2026—and will likely need documented due‑diligence processes, valuation policies, liquidity management protocols, and benchmarking procedures to rely on the safe harbor once finalized. (federalregister.gov)
Key numbers
- The DOL proposed a rule and issued a 'safe harbor' that would let 401(k) plan sponsors include private markets and other alternative investments in DC plans, broadening what sponsors can offer and changing due-diligence expectations.
- (natlawreview.com) DOL published the proposed rule “Fiduciary Duties in Selecting Designated Investment Alternatives” at the end of March 2026 and opened a public comment docket that closes June 1, 2026 (a 62‑day comment period).
- (federalregister.gov) The proposal implements Executive Order 14330 issued August 7, 2025 and follows the DOL’s submission of the draft to the White House Office of Management and Budget on January 13, 2026.
- (groom.com) The DOL and rule text call for independent, conflict‑free quarterly valuations for non‑public assets and reference adherence to FASB ASC 820 fair‑value measurement standards.
What happens next
- (federalregister.gov) The DOL proposed a rule and issued a 'safe harbor' that would let 401(k) plan sponsors include private markets and other alternative investments in DC plans, broadening what sponsors can offer and changing due-diligence expectations.
Quick answers
What happened in 401(k)s open to alts?
The DOL proposed a rule and issued a 'safe harbor' that would let 401(k) plan sponsors include private markets and other alternative investments in DC plans, broadening what sponsors can offer and changing due-diligence expectations. (natlawreview.com)
Why does 401(k)s open to alts matter?
DOL published the proposed rule “Fiduciary Duties in Selecting Designated Investment Alternatives” at the end of March 2026 and opened a public comment docket that closes June 1, 2026 (a 62‑day comment period). (federalregister.gov) The proposal implements Executive Order 14330 issued August 7, 2025 and follows the DOL’s submission of the draft to the White House Office of Management and Budget on January 13, 2026. (whitehouse.gov) The agency says the rule uses a six‑factor, process‑based test—performance, fees, liquidity, valuation, benchmarking, and complexity—that fiduciaries must objectively, thoroughly, and analytically evaluate when selecting designated investment alternatives. (dol.gov) The proposal gives a presumption of prudence to fiduciaries who document an “objective, thorough and analytical” process and it expressly contemplates private market sleeves inside target‑date or asset allocation funds and annuity options with liquidity restrictions. (groom.com) The DOL and rule text call for independent, conflict‑free quarterly valuations for non‑public assets and reference adherence to FASB ASC 820 fair‑value measurement standards. (groom.com) Industry groups and service providers have publicly reacted: asset managers like Empower issued supportive statements, while plan advisers and ERISA counsel have flagged that the key open question is whether the rule will provide meaningful legal clarity for fiduciaries. (marketwatch.com) Plan sponsors are now on a fixed timetable—submit comments by June 1, 2026—and will likely need documented due‑diligence processes, valuation policies, liquidity management protocols, and benchmarking procedures to rely on the safe harbor once finalized. (federalregister.gov)
