The federal Office of Management and Budget (OMB) has finished its review of the Labor Department's proposed rule, "Fiduciary Duties in Selecting Designated Investment Alternatives," that could pave the way for promoting alternative investments in 401(k) plans.
The rule proposal was filed at OMB in mid-January in response to President Donald Trump's executive order "Democratizing Access to Alternative Assets for 401(k) Investors."
The exact contents of the proposal will be unclear until Labor releases the rule, which could be as soon as Thursday.
"I will be especially interested to see if it addresses broad fiduciary investment issues in addition to alternative investment-specific issues," Brad Campbell, a former head of the DOL's Employee Benefits Security Administration (EBSA), told T&R sister publication ThinkAdvisor Wednesday in an email. "It is an opportunity for the Department to provide additional regulatory safeguards around the prudent fiduciary process that could reduce wasteful litigation that harms plans and participants."
Lisa Gomez, another former head of the DOL's EBSA, told ThinkAdvisor in a previous interview that the DOL's filing "is expected to propose the circumstances under which a plan fiduciary of a defined-contribution plan can offer private investments, private equity, private credit, and some other types of alternative investments in 401(k) plans."
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From: BenefitsPRO
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