My prior posts completed the discussion of the four Factors in the DOL’s proposed regulation that apply to most investments in participant-directed private sector plans. This article turns to the first of the two Factors that are specifically designed to address illiquid and hard-to-value investments, such as private funds. The Factor discussed in this article is Liquidity. After the Liquidity articles, I will turn to the Valuation Factor. As background, the DOL’s proposed regulation on selecting investments, including alternative assets, 2026-06178.pdf, identifies six factors that should be considered in the process of selecting any investments for participant-directed plans, such as 401(k) plans and private sector 403(b) plans. The six factors are: Performance, Fees, Liquidity, Valuation, Performance Benchmark, and Complexity. The proposal describes each of those factors and provides 20 examples of their application. In earlier posts, I covered four of the factors—Performance, Fees, Performance Benchmarks and Complexity, and their examples. In the proposal, the DOL described the Liquidity Factor and the associated fiduciary requirements as: (i) Liquidity. The fiduciary must appropriately consider and determine that the designated investment alternative will have sufficient liquidity to meet the anticipated needs of the plan at both the plan and individual levels. For example,