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 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.

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 American Investment Council, an advocacy and research organization for the private investment industry, supports the Proposed Rule because it provides fiduciaries with a clearer roadmap for selecting investment options that include alternative assets. They argue that the rule will help reduce litigation fears and improve retirement outcomes for workers by allowing for greater diversification in 401(k) plans.

SIFMA supports the Department's proposed asset-neutral, process-based safe harbor for selecting investment alternatives but recommends specific improvements. They advocate for greater fiduciary discretion, harmonizing conflict language with other standards, and ensuring that private assets and Collective Investment Trusts (CITs) receive equal treatment.

The Real Estate Roundtable (RER) strongly supports the proposed rule to clarify fiduciary duties and establish a safe harbor for including alternative assets, such as real estate and private equity, in 401(k) plans. They argue the rule will reduce litigation risk, increase investment choice for workers, and fulfill the goals of Executive Order 14330 to democratize access to these assets.

The Small Business & Entrepreneurship Council (SBE Council) supports the Department of Labor's proposed rule to expand access to alternative assets in 401(k) plans, arguing it modernizes retirement policy and provides better opportunities for small business employees. While supportive, the organization recommends refinements to avoid imposing unnecessary SEC liquidity requirements on collective investment trusts and to clarify valuation standards for private assets.

Morningstar, a provider of independent investment research, supports the proposed rule but argues that the current framework does not go far enough to protect retirement plan participants. They recommend strengthening the safe harbor by requiring fiduciary control over allocation and liquidity, addressing commercial pressures, and clarifying specific factors like concentration risk, fee transparency, and independent valuation.