My earlier posts discussed four of the six Factors in the DOL’s proposed regulation that apply to most investments in participant-directed private sector plans. This article discusses the first example of the application of the Liquidity Factor, which is one of the two Factors (along with the Valuation Factor) that specifically target illiquid, hard-to-value investments, such as private funds. 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 my last article, Alternative Assets (22), I started the discussion of the Liquidity factor with the DOL’s description of that factor: (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, because participant-directed