Fiduciary Duties In Selecting Designated Investment Alternatives

The NYU Stern Center for Business and Human Rights opposes the proposed rule, arguing that it fails to address the lack of transparency in private equity and the risks associated with continuation funds. They advocate for a withdrawal of the rule or, alternatively, for mandatory public disclosures and a ban on 401(k) participation in continuation vehicles.

The commenters, identifying as business owners, oppose the proposed rule because they believe it infringes on their right to choose investment alternatives and could expose employee retirement funds to risky assets like private equity and crypto. They argue that the rule should be struck down to protect their autonomy in managing retirement funds.

The Coalition for Modern Retirement Solutions (CMRS), represented by Mayer Brown LLP, supports the Department's asset-class neutral framework and its efforts to encourage innovation in private market investments. They request specific refinements to the final rule to better support Collective Investment Trusts (CITs), clarify that the safe harbor is optional, and ensure the rule provides sufficient flexibility and deference to plan fiduciaries.

The Public Investors Advocate Bar Association (PIABA) opposes the proposed rule because it creates a "process-based safe harbor" that they argue weakens fiduciary accountability and investor protections. They contend that the proposal facilitates exposure to complex, illiquid, and opaque alternative investments—such as private equity and cryptocurrency—which are ill-suited for retirement accounts and increase the risk of financial harm to workers.

Partners Group, a global private markets firm, supports the Department's proposed process-based, asset-neutral safe harbor for fiduciaries selecting investment alternatives. They argue the rule correctly emphasizes fiduciary discretion and process over outcomes, though they suggest specific refinements to avoid creating new litigation risks or rigid regulatory minimums.

The Investment Company Institute supports the Department of Labor's proposed regulation establishing an asset-neutral, process-based safe harbor for selecting designated investment alternatives in 401(k) plans. They argue the proposal provides much-needed clarity for fiduciaries, helps democratize access to private market assets, and reduces the risk of frivolous litigation.

Tim McGlinn, Founder of The Altview, opposes the proposed rule, arguing that it serves as a marketing tool for the financial services industry rather than a protection for investors. He contends that alternative investments often provide lower risk-adjusted returns and higher fees, and that the rule may prioritize the interests of investment managers and employers over those of employee-investors.

The National Association of Personal Financial Advisors (NAPFA) opposes the Proposed Rule in its current form, arguing that it weakens protections for retirement plan participants by allowing high-fee or risky alternative assets with inadequate safeguards. They advocate for more robust protections, including mandatory participant education, consent, and "opt-in" requirements for alternative investments.

The AFL-CIO and several labor unions oppose the Proposed Rule because it fails to sufficiently warn plan fiduciaries about the risks of including alternative assets like private equity, private credit, and cryptocurrency in 401(k) plans. They argue these assets are often too illiquid, opaque, and volatile for individual retirement accounts and urge the EBSA to include specific cautionary language and reinstate previous restrictive guidance.

The American Federation of State, County and Municipal Employees (AFSCME) opposes the proposed rule, arguing that it prioritizes procedural "check-the-box" safe harbors over substantive fiduciary prudence. They contend that the rule encourages high-risk, high-cost alternative assets (like private equity and cryptocurrency) into 401(k) plans, which could undermine the retirement security of workers.