Alternative Assets (4)—DOL Proposal and Relevant Factors for Investment Selection


General
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In my three posts in this series–Alternative Assets (1), Alternative Assets (2), and Alternative Assets (3), I discussed some of the “big picture” provisions in the DOL’s proposed regulation on the Selection of Designated Investment Alternatives for participant-directed plans (2026-06178.pdf).

With this article, we begin to get into the “weeds”, or more detailed provisions, of the proposal.

The proposed regulation includes a provision that, in my view, properly reflects the current state of the law.  More specifically, it says that fiduciaries (and fiduciary advisors) must consider “all” of the relevant factors when evaluating investments. (The DOL uses the term “relevant” to mean the factors that a knowledgeable investor would want to consider when selecting an investment of a particular type for a participant-directed plan.)

Here’s what the proposal says:

(e) Prudence requires appropriate consideration of all relevant factors.

To satisfy the duty of prudence in section 404(a)(1)(B) of ERISA when selecting a designated investment alternative, the plan fiduciary must follow a prudent process under which it gives appropriate consideration, including, where appropriate, with the benefit of analysis of professional advisors like third-party investment advice fiduciaries within the meaning of section 3(21)(A)(ii) of ERISA, to those facts and circumstances that, given the scope of such fiduciary’s investment responsibility or authority, the fiduciary knows or should know are relevant to the particular designated investment alternative. Consistency with section 404(a)(1)(B) of ERISA or this paragraph does not, however, excuse a fiduciary from complying with its additional obligations under ERISA, including under sections 404(a)(1)(A) and 406. [The bolding is  mine.]          

Comment: In other words, a fiduciary (including a fiduciary advisor) must, when selecting investments, decide on all of the considerations that are relevant to making an informed decision, gather the information about those considerations needed to make an informed decision, and then review and evaluate that information. If this proposal becomes a final rule, the investment policy statements for participant-directed plans should be amended to properly describe this process. In fact, since this is the current state of the law—at least in my view—the IPS’s could be revised now to more accurately describe the fiduciary process.

I bolded the language about the use of advisors to emphasize the importance that the DOL gives to advisors as a part of a prudent process.  The preamble and the proposed rule constantly make references to the use of qualified advisors, both as 3(21) non-discretionary advisors and as 3(38) investment managers. (The proposal uses the words “advice”, “advisor” and “adviser” a total of 108 times.) While the DOL’s discussion says that fiduciaries are not required to use advisors, the discussions clearly suggest that the DOL considers the use of advisors as indicative of a prudent process.

The discussion in the preamble adds some color to the proposed rule:

4.4. Prudence Requires Appropriate Consideration of All Relevant Factors— Proposed Paragraph (e)

Paragraph (e) of the proposed regulation sets forth the general standard of what prudence requires when selecting a designated investment alternative. In relevant part, it provides that to satisfy the duty of prudence when selecting a designated investment alternative, the plan fiduciary must follow a prudent process under which it gives appropriate consideration to those facts and circumstances that, given the scope of such fiduciary’s investment responsibility or authority, the fiduciary knows or should know are relevant to the particular designated investment alternative. This provision mirrors language in paragraph (b)(1) of the 1979 Investment Duties Regulation. Paragraph (e) of the proposed regulation does not, however, contain the ‘‘and act accordingly’’ language that is in paragraph (b)(1)(ii) of the Investment Duties Regulation. In lieu of the ‘‘and act accordingly’’ language, paragraphs (g) through (l) of the proposed regulation set forth six relevant factors and safe harbor examples demonstrating what it means for a fiduciary to ‘‘act accordingly’’—and therefore to be prudent—in the circumstances addressed in the examples. Thus, the proposed regulation supplements and expands on the Investment Duties Regulation in the context of selecting designated investment alternatives for participant-directed individual account plans, especially with respect to the six enumerated factors and related safe harbor examples. Further, like many safe harbor examples in the proposed regulation, paragraph (e) of the proposed regulation reinforces the idea that it also may be appropriate for the named fiduciary to enlist the services of professional advisors, to carry out the necessary objective, thorough, and analytical analysis. [The bolding is mine.]

Comment: The discussions in the proposal package, and DOL speakers, repeatedly refer to the phrase “objective, thorough and analytical” process (or “OTA”) for selecting investments.  Clearly that is the DOL’s expectation.

Keep in mind that the six identified factors are not all of the factors that must be considered; instead, fiduciaries must identify and evaluate all “relevant” factors. Both the proposed rule and the preamble say that the standard is that fiduciaries should review all the factors that a “fiduciary knows or should know are relevant to the particular designated investment alternative”.  That is based on ERISA’s prudent person rule which uses the standard of what a “person who is familiar with such matters” would know. When you consider the full range of potential investments and the complexity of some investments, it seems unlikely that the typical fiduciary, or committee member, would be able to identify all of the relevant factors for all of those potential investments.  As a result, the use of qualified fiduciary advisors is encouraged by a fair reading of the DOL’s package—even though it is not required in the proposal.

The quoted DOL language also refers to six factors and a fiduciary safe harbor.  That is for a future article.

Concluding thoughts

I would view the concept of “all relevant factors”, and the requirement to consider them, as being the rule now.  As I read the preamble and proposal, the DOL considers this discussion to be a statement of the current law, as opposed to a groundbreaking provision.

As a result, to the extent that plan investment policy statements, processes, and reports do not include this concept, it should be included going forward.

My next article will discuss the safe harbor for the six factors.  After that we will turn to a discussion of each of those identified factors.

 

Alternative Assets (3)—DOL Proposal and Selection of Plan Investment Menu


General

In my first post in this series, Alternative Assets (1), I said that a surprise in the DOL’s proposed regulation on selecting investments for participant-directed plans (2026-06178.pdf) was that it went beyond the alternative assets mentioned in last August’s Executive Order and instead applied to all investments in participant-directed plans—both traditional and alternative.

There were other surprises in the proposed regulation.  My second article, Alternative Assets (2), discussed the “maximum” discretion fiduciaries have to select investments in a participant-directed plan.

Another surprise, but a pleasant one, is a proposed rule that says that the selection of the plan’s menu must be prudent, in addition to the requirement that the selection of each investment option being prudent.  I suspect that we have acted in that way and believed that it was what ERISA intended, but I don’t recall seeing it in writing before.

The proposal says:

(d) Duty to act prudently when establishing a plan investment menu to maximize risk-adjusted returns. A fiduciary with responsibility or authority for selecting designated investment alternatives has a duty to act prudently also when establishing a diversified menu of designated investment alternatives to further the purposes of the plan by enabling participants and beneficiaries in such plan to maximize risk-adjusted returns, net of fees, on investment across their entire portfolios in their plan. [Bolding added by me to distinguish the heading from the body]

Comment: I like this provision.  As best as I can remember, this is the first time that the DOL has said that fiduciary responsibility for investment selection extends beyond the selection of individual investments and includes the selection of an appropriate lineup of investments for participant direction (although there is language in another regulation—which appears to apply to pooled investment arrangements-that could arguably apply to the selection of investment lineups in participant-directed plans).  In the past, I think that most fiduciaries have considered the 404(c) regulation’s provision on a “broad range” of investments (which discussed including at least 3 investment options that allowed participant to create appropriate balanced portfolios in their accounts) and then looked at industry practices to decide how many  and which investment options to include in the plan’s lineup.  Specifically, the 404(c) regulation provides in part:

(3)Broad range of investment alternatives.

(i) A plan offers a broad range of investment alternatives only if the available investment alternatives are sufficient to provide the participant or beneficiary with a reasonable opportunity to:

(A) Materially affect the potential return on amounts in his individual account with respect to which he is permitted to exercise control and the degree of risk to which such amounts are subject;

(B) Choose from at least three investment alternatives:

(1) Each of which is diversified;

(2) Each of which has materially different risk and return characteristics;

(3) Which in the aggregate enable the participant or beneficiary by choosing among them to achieve a portfolio with aggregate risk and return characteristics at any point within the range normally appropriate for the participant or beneficiary; and

(4) Each of which when combined with investments in the other alternatives tends to minimize through diversification the overall risk of a participant’s or beneficiary’s portfolio;…

I also think that most plan fiduciaries take into account the demographics of the participants in designing their investment lineups; however, my experience is that it was done as a practical matter as opposed to being seen as a legal requirement. This provision, even though in a proposal, should be seen as reflecting the DOL’s views on fiduciary responsibilities. For example, plan fiduciaries should consider adding a new section to their investment policy statements about the process and criteria for determining the appropriate investment menu for their plans. While there isn’t any clear guidance on how to design that menu, one approach—and probably a safe one–would be to base it primarily on the demographics of the covered workforce.

I also want to comment on the reference to “maximize risk-adjusted returns”.  I have two thoughts about that.  First, I don’t like the use of “maximize”.  That suggests some legal obligation to shoot for the highest returns as opposed to having a process for obtaining reasonable returns for a particular asset class and investment style. (To offset my criticism, I want to acknowledge that the DOL description of the process starts with identifying the appropriate risk profile of an investment type for the particular plan—probably based on the fiduciaries’ evaluation of the demographics of the covered workforce.)

The preamble augments the proposed rule by explaining:

4.3. Fiduciaries Have a Duty To Act Prudently When Establishing a Plan Investment Menu to Maximize Risk Adjusted Returns—Proposed Paragraph (d)

Paragraph (d) of the proposed regulation provides that a fiduciary with responsibility or authority for selecting designated investment alternatives has a duty to act prudently also when establishing a diversified menu of designated investment alternatives to further the purposes of the plan by enabling participants and beneficiaries in such plans to maximize risk-adjusted returns on investment, net of fees, across their entire portfolio. This in turn allows participants with different risk capacities to maximize their returns for a given level of risk. This provision is intended to serve as an important reminder that each designated investment alternative selected by a plan fiduciary plays a role in the larger investment menu and the fiduciary has a duty to prudently curate the menu of investments overall. Put differently, ERISA’s duty of prudence applies not just to the selection of each designated investment alternative but also to the collection of designated investment alternatives as a whole—i.e., to both the individual parts and the sum. While, as explained in the scope discussion above, the focus of the proposed regulation is on the application of the duty of prudence to a fiduciary’s selection of an individual designated investment alternative for a plan’s menu, the proposed regulation does not address the question of how to prudently curate a menu of investments overall. This question is beyond the scope of this proposed regulation. In this regard, the Department understands that, to obtain the fiduciary relief available under section 404(c) of ERISA, many participant-directed individual account plans establish menus that seek to comply with the requirements of regulations implementing section 404(c) of ERISA. These regulations, which are optional, generally require the menu to offer a broad range of investment alternatives that meets specified diversification and risk and return requirements. Comments are solicited on whether future guidance should address the question of what process is required to curate a prudent menu of investments overall or whether the requirements of the regulations implementing section 404(c) continue to be best practice. [Bolding added by me; footnotes and citations omitted]

 

Comment:  I bolded the parts about the fiduciary duty to curate the investment lineup as a whole (as opposed to the separate fiduciary duty to select each investment prudently) in order to highlight the DOL’s position.  I then highlighted the phrase about the lack of guidance on how fiduciaries should act to satisfy that duty in order to point out the lack of guidance about how to do that. Note that the DOL is asking for comments about how the private sector thinks that job should be done.

Concluding thoughts

I like—and agree with—the DOL’s position that it is a fiduciary duty to prudently establish the investment lineup (or “menu”) as a whole.  I believe it will encourage more thoughtful processes about developing the lineup and will, as a result, cause fiduciaries and advisors to focus even more on the development of investment lineups that are appropriate for the covered employees—the “demographics”.

The first step will be for advisors to engage fiduciaries (e.g., plan committees) in discussions about the plan investment design which, most likely, will lead to a conversation about the needs and circumstances of the covered workers. In turn, fiduciaries and advisors will need to amend their investment policy statements to reflect those discussions and decisions.

 

Alternative Assets (2)—the Executive Order and Proposed Regulation Continued


General
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In my last post, Alternative Assets (1), I said that a surprise in the DOL’s proposed regulation on
selecting investments was that it went beyond alternative assets and asset allocation
investments, which were the focus of last August’s Executive Order, and instead applied to all
investments in participant-directed plans—both traditional and alternative.
There were other surprises in the proposed regulation. For example, the proposal says:

(c) Prudent fiduciaries have maximum discretion to select investments to further the
purposes of the plan. Section 404(a)(1)(B) of ERISA does not require or restrict any
specific type of designated investment alternative, except insofar as designated
investment alternative might be otherwise illegal. For example, there is no per se rule
respecting investment in alternative assets generally or the inclusion of private market
investments, ….

Comment: The concept of government neutrality on the types of investments for ERISA-
governed retirement plans is not the surprise. The surprise is the wording of “maximum
discretion”. I know what it means conversationally and I think I know the message the DOL is
trying to convey, but as a lawyer, I’m not sure how it applies because it’s not defined in ERISA
or in the proposed regulation. For example, does a fiduciary need to consider the needs and
circumstances of the covered participants—such that fiduciary responsibility limits the
application of the discretion? I would think so and, if so, it would be helpful to have guidance
to that effect.

The discussion in the proposal’s preamble goes a little further, but doesn’t really answer the
question of how fiduciaries should prudently exercise that discretion:

4.2. Fiduciaries Have Maximum Discretion to Select Investments to Further the
Purposes of the Plan— Proposed Paragraph (c)
Paragraph (c) of the proposed regulation addresses the question of whether any
designated investment alternative is per se prudent or imprudent under section
404(a)(1)(B) of ERISA. The text of section 404(a)(1)(B) of ERISA is plainly neutral to types
or classes of designated investment alternatives that a fiduciary selects for the plan
menu, so long as the fiduciary’s selection process adheres to section 404(a)(1)(B)’s
articulated standard of care. Thus, plan fiduciaries have maximum discretion to select
investments to further the purposes of the plan. Paragraph (c) of the proposed
regulation adopts this foundational principle, providing, in relevant part, that section
404(a)(1)(B) of ERISA ‘‘does not require or restrict any specific type of designated

investment alternative.’’ However, the investment discretion ERISA confers on plan
fiduciaries is not a license to ignore other applicable laws. Paragraph (c) of the proposed
regulation reflects this basic principle by clarifying that maximum discretion
notwithstanding, a plan fiduciary is prohibited from selecting a designated investment
alternative that is otherwise illegal. For example, as paragraph (c) of the proposed
regulation clarifies, an investment in a foreign adversary which violates the Specially
Designated Nationals and Blocked Persons List administered by the Office of Foreign
Assets Control of the United States Department of the Treasury is not permitted.
[Footnotes and citations omitted]

Comment: As with the proposed rule, the preamble uses the unfortunate (in my opinion) word
“maximum”. I believe the Department’s intent is to, first, emphasize that ERISA is neutral in it’s
approach to investments in retirement plans. But that doesn’t mean that there aren’t any
rules. In effect, it means that investment decision-making is not up to the government, but
instead is a private sector responsibility for plan fiduciaries (and subject to ERISA’s fiduciary
standards). In that sense, if the fiduciaries make imprudent decisions in selecting the
investment types, they could be subject to personal liability for fiduciary breach. It would be
helpful to know the Department’s views on fiduciary responsibility for selecting investment
types. For example, must fiduciaries consider the needs and circumstances of the workforce
covered by the plan? Must fiduciaries consider the investment knowledge and experience of
the covered workforce? As a best practice, that would be the case, but is it the law?
My view of the DOL’s second intent is that it wants to limit the ability of courts to review the
decisions made by fiduciaries in selecting the types of investments chosen by fiduciaries. For
example, if fiduciaries determine that hard-to-understand investments are appropriate for their
plans, a “maximum discretion” standard would make it hard to challenge that decision. In that
regard, it would be helpful for the DOL to provide additional guidance on (1) the limits on
“maximum discretion” above and beyond illegal investments and (2) the factors that fiduciaries
should evaluate when considering the types of investments that are prudent to offer to
participants (for example, are they appropriate for the demographics of the covered
workforce?).

The Department’s emphasis on investment neutrality is significant and, in my opinion, correct.
However, it doesn’t mean that just because fiduciaries can theoretically do anything that it is
prudent to do everything.

Concluding thoughts

The provisions discussed in this article and my first one are “big picture” guidance. My next
article will be about the DOL’s position that setting the menu of investments is a fiduciary

activity—which makes sense. And it may at least partially answer my questions in this article
about limits on the ability of fiduciaries to select types of investments that are not appropriate
for the covered workforce. Then, I will get into the weeds of the DOL’s expectations for the
factors and processes for selecting any and all investments for participant-directed plans. That
includes both alternative assets (such as private funds) and traditional investments (such as
mutual funds).

Alternative Assets (1)—the Executive Order and Proposed Regulation


General
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The Employee Benefit Security Administration (EBSA) of the US Department of Labor (DOL) has issued a proposed regulation on the selection of investments for participant-directed plans, such as 401(k) plans. 2026-06178.pdf

The Beginning: An Executive Order

The proposal is the direct result of an August 7, 2025 White House Executive Order (EO) entitled “Democratizing Access to Alternative Assets for 401(k) Investors”.  Democratizing Access to Alternative Assets for 401(K) Investors – The White House

The EO defines “alternative assets” as:

  • Private market investments, such as private equity and private credit funds, and hedge funds.
  • Direct and indirect investments in real estate, including debt associated with real estate.
  • Actively managed investment vehicles investing in digital assets.
  • Direct and indirect investments in commodities.
  • Direct and indirect interests in projects financing infrastructure development.
  • Lifetime income investment strategies including longevity risk-sharing pools.

The EO then says, in relevant part:

Within 180 days of the date of this order, the Secretary shall further, as the Secretary deems appropriate and consistent with applicable law, seek to clarify the Department of Labor’s position on alternative assets and the appropriate fiduciary process associated with offering asset allocation funds containing investments in alternative assets under ERISA.  Such clarification must aim to identify the criteria that fiduciaries should use to prudently balance potentially higher expenses against the objectives of seeking greater long-term net returns and broader diversification of investments.  [The bolding was added by me]

In other words, the DOL is ordered to issue guidance on the prudent selection of “asset allocation funds” that include allocations to alternative assets, including the criteria that fiduciaries should use in a prudent process.

The proposed regulation is responsive to that order and, in fact, goes beyond it by describing the criteria that apply to all investments for participant-directed plans, including both alternative assets and traditional assets (such as mutual funds and collective investment trusts).  That means that fiduciaries of plans that don’t include alternative investments need to pay attention to this proposal as well.

Also, while the EO limited itself to allocations to alternative investments as parts of asset allocation investments and strategies, the proposal is much broader….it covers the selection of standalone alternative investments.

Realistically, though, plan sponsors may choose not to add alternatives (such as private funds) as standalone options.  Instead, at least for the foreseeable future, they are more likely to allow alternatives to be included in asset allocation funds and strategies, such as target date funds and managed participant accounts.  In that case, the likely course of action would be to transfer the job of prudently evaluating and acting on the criteria identified by the DOL to the 3(38) investment managers of those funds and strategies.

The EO also expressed the White House’s concerns about “frivolous” lawsuits against plan fiduciaries and directs the DOL go take steps to reduce that risk:

The Secretary shall also propose rules, regulations, or guidance, as the Secretary deems appropriate, that clarify the duties that a fiduciary owes to plan participants under ERISA when deciding whether to make available to plan participants an asset allocation fund that includes investments in alternative assets, which rules, regulations, and guidance may include appropriately calibrated safe harbors.  In carrying out the directives in this section to further the policy set forth in this order, the Secretary shall prioritize actions that may curb ERISA litigation that constrains fiduciaries’ ability to apply their best judgment in offering investment opportunities to relevant plan participants. [I added this bolding too]

The proposed regulation also addresses that part of the EO by developing a fiduciary “safe harbor” that will, once the regulation is finalized (and if it survives court challenges), be more protective of plan fiduciaries. However, notwithstanding the label, the protection is not a safe harbor as that term is commonly used; instead, it is a conditional and rebuttable presumption. (The details of the safe harbor are for a future article.  This article is just an overview.)

 

The Proposed Regulation

The proposal responded to the White House EO by describing the criteria (or, at least, some of the criteria) for selecting alternative assets and by developing a presumption that the EBSA refers to as a safe harbor.

As I will explain in a future article, the proposed regulation identifies six factors that the DOL says are common to the consideration of all investments, alternative and traditional, for participant directed plans.  In addition, it says that there may be other “relevant” factors beyond those six.  (A “relevant” factor is one that a knowledgeable investor would decide is material to making a decision about a particular investment.) Fiduciaries must consider all relevant factors in making a prudent investment decision.  As the DOL explains, that involves identifying the criteria for evaluating a particular investment, and then obtaining and evaluating that information.  In some cases, the information and its evaluation may exceed current investment practices—but that is for a future article.

Concluding thoughts

That’s it for now.  There is much to talk about.  My next post will be about other surprises in the proposal.  After that, I will get into the concept of relevant factors and the six relevant factors that the DOL considers to be common to the evaluation of all investments for participant-directed plans. Then, in due course, I will discuss the scope and limits of the safe harbor.

The Last Rodeo


401(k)

Last year, I asked ChatGPT to write lyrics for a country and western song about retirement . . . about the uncertainty of moving into a new phase of life. It wrote these lyrics about a cowboy who had a 401(k) plan.  While we don’t often think of cowboys having 401(k) plans, this one did. I am posting it this year as I retire from Faegre Drinker and move on.  But I will continue to be involved in the 401(k) world.  After all, Fouro1k and I grew up together. Until we meet again.

(Verse 1)

I’ve spent all my life punchin’ that clock,
Dust on my boots, walkin’ the walk.
Built a name, carved it deep, strong and proud,
But now the quiet’s callin’ out loud.

(Chorus )

It’s the last rodeo, it’s time to ride on,
But I’m scared of the shadows, the dreams that are gone.
Will I still matter, when I lay my tools down,
Or fade like an echo, in a cold empty town?

(Verse 2)

Friends shake my hand, say “You’ve earned some rest,”
But this heart in my chest still pounds at my best.
I’ve lived for the rush, the workin’ man’s pride,
Now I’m fearin’ the silence waitin’ outside.

(Chorus)

It’s the last rodeo, it’s time to ride on,
But I’m scared of the shadows, the dreams that are gone.
Will I still matter, when I lay my tools down,
Or fade like an echo, in a cold empty town?

(Bridge)

I spent years bein’ needed, now I’m learnin’ to roam,
But it’s hard when you don’t know the way back home.
The clock stops tickin’, but the heart don’t slow,
What’s left of a cowboy, with nowhere to go?

(Verse 3)

If I let go, will I still belong?
Can I make peace in an old man’s song?
I used to know where I was headin’ and why,
Now the road disappears in the night sky.

(Chorus)

It’s the last rodeo, it’s time to ride on,
But I’m scared of the shadows, the dreams that are gone.
Will I still matter, when I lay my tools down,
Or fade like an echo, in a cold empty town?

(Outro)

So, here’s to the years, the hard-earned scars,
To reachin’ for dreams that seem way too far.
I’ll ride to the edge, ‘til the end of the line,
And hope that I mattered, just one last time.

Things I Worry About (28): SEC Exams About Older and Retirement Investors


IRA, rollovers, SEC
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Key Takeaways

  • The SEC Division of Examinations has issued its 2026 fiscal year Examination Priorities.
  • The Priorities include a focus on older investors, investing for retirement and rollovers.
  • This article discusses those priorities.

The SEC Division of Examinations has published its 2026 Examination Priorities. (2026-exam-priorities.pdf)  While the Priorities are far reaching, this article looks at the references to older investors, retirement investors and rollovers.

Among those references are:
Continue reading Things I Worry About (28): SEC Exams About Older and Retirement Investors →

Things I Worry About (27): Pooled Employer Plans and DOL RFI (8)


DOL, fiduciary, prohibited transaction
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Key Takeaways

  • The DOL has issued guidance about PEPs—pooled employer plans—that includes questions designed to assist the DOL in developing future guidance about PEPs.
  • Some of those questions suggest that the DOL is concerned about conflicts of interest in the organization and management of PEPs.
  • This article continues a discussion of the questions asked by the DOL and my comments on those questions and issues. In particular, this article covers conflicts of interest questions raised by the DOL.
  • While the DOL questions are for future guidance, advisors and providers should be paying attention to the DOL’s questions because, among other reasons, some current practices may be disfavored by the DOL.

This series of articles examines the DOL’s July 29, 2025, release that includes interpretative guidance on PEPs, solicits information about PEP practices, includes tips for selecting PEPs, and discusses a possible fiduciary safe harbor for adopting PEPs. 2025-14281.pdf (SECURED).

The first two articles in this series,  Things I Worry About (20) and Things I Worry About (21), discussed some of the DOL’s findings when it reviewed the 2023 Forms 5500 filed by PEPs.

Continue reading Things I Worry About (27): Pooled Employer Plans and DOL RFI (8) →

Things I Worry About (26): Pooled Employer Plans and DOL RFI (7)


DOL, fiduciary
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Key Takeaways

  • The DOL has issued guidance about PEPs—pooled employer plans—that includes questions designed to assist the DOL in developing future guidance about PEPs.
  • Some of those questions suggest a possible fiduciary safe harbor for small employers who adopt PEPs.
  • This article continues a discussion of the questions asked by the DOL and my comments on those questions and issues. In particular, this article covers some of the “safe harbor” questions raised by the DOL.
  • While the DOL questions are for future guidance, advisors and providers should be paying attention because, among other reasons, some current practices may be disfavored by the DOL.

This series of articles examines the DOL’s July 29, 2025, release that includes interpretative guidance on PEPs, solicits information about PEP practices, includes tips for selecting PEPs, and discusses a possible fiduciary safe harbor for adopting PEPs. 2025-14281.pdf (SECURED).

The first two articles in this series,  Things I Worry About (20) and Things I Worry About (21), discussed some of the DOL’s findings when it reviewed the 2023 Forms 5500 filed by PEPs.

The third, fourth and fifth articles, Things I Worry About (22), Things I Worry About (23), and Things I Worry About (24), reviewed issues identified by the DOL for employers who may be deciding whether to join a PEP.

Continue reading Things I Worry About (26): Pooled Employer Plans and DOL RFI (7) →

Things I Worry About (25): Pooled Employer Plans and DOL RFI (6)


DOL, fiduciary
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Key Takeaways

  • The DOL has issued guidance about PEPs—pooled employer plans—that includes questions designed to assist the DOL in developing future guidance about PEPs.
  • Some of those questions suggest a possible fiduciary safe harbor for small employers who adopt PEPs.
  • This article begins a discussion of the questions asked by the DOL and my comments on those questions and issues. In particular, this article covers some of the “safe harbor” inquiries. The remaining DOL safe harbor questions will be discussed in my next article.
  • While the DOL inquiries are for future guidance, advisors and providers should be paying attention because, among other reasons, some current practices appear to be disfavored by the DOL.

This series of articles examines the DOL’s July 29, 2025, release that includes interpretative guidance on PEPs, solicits information about PEP practices, includes tips for selecting PEPs, and discusses a possible fiduciary safe harbor for adopting PEPs. 2025-14281.pdf (SECURED).

The first two articles in this series,  Things I Worry About (20) and Things I Worry About (21), discussed some of the DOL’s findings when it reviewed the 2023 Forms 5500 filed by PEPs.

The third, fourth and fifth articles, Things I Worry About (22), Things I Worry About (23), and Things I Worry About 24, reviewed issues identified by the DOL for deciding whether to join a PEP.

This article begins a series about the part of the guidance that was an RFI, where the DOL is soliciting information that would be helpful for future guidance. I quote and then discuss the questions that are the most interesting and relevant to employers and service providers.

Continue reading Things I Worry About (25): Pooled Employer Plans and DOL RFI (6) →