Brad Campbell and Joshua Waldbeser Discuss DOL’s 401(k) Alternative Assets Plan in ThinkAdvisor

In an article for ThinkAdvisor, benefits and executive compensation partners Brad Campbell and Joshua Waldbeser discussed the Department of Labor’s (DOL) recently proposed regulation, which outlines the steps that managers of 401(k) plans should take when considering alternative assets as part of their investment lineups.

“To me, it's less about alternatives — although alternatives are certainly a key part of this,” Campbell explained. “It's really more about trying to establish a safe harbor that's going to let fiduciaries know or have better evidence to sustain earlier actions in litigation, say on motions to dismiss. And really try to change the dynamic we're seeing in the ERISA litigation space.”

Waldbeser added that the DOL’s plan “is neither endorsing nor discouraging any asset class or any investment — whether alternative or otherwise.” He continued, "The principles that they [DOL] set forth are applicable to registered funds, mutual funds, CITs, private funds, anything that might be used, either directly or indirectly, to facilitate access to investments for defined contribution plan participants."

Campbell and Waldbeser agreed that DOL’s proposed plan, if finalized in its current form, is unlikely to change in the next administration. “I'm fairly bullish it will stand the test of time,” Waldbeser concluded.