The DOL’s proposed regulation on selecting investments, including alternative assets, 2026-06178.pdf, identifies six factors that need to be considered in the process of selecting 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 the six factors and provides 20 examples to illustrate their application. In Alternative Assets (6), I discussed the first of those six factors—Performance, and the DOL’s description of the required process for evaluating performance (or, more accurately, expected future returns). In my last article, Alternative Assets (7), I reviewed the first of two DOL examples of the process for evaluating performance. While not entirely clear, the description of the processes in the examples—both for  this factor and throughout the proposal–could be viewed as one approach to satisfying the evaluation of the particular factor or it could be viewed as being the only way to satisfy the factor.  If the latter, it would require major changes to the processes of most plan sponsors and advisers.  Hopefully the final regulation will clarify the DOL’s intentions. This article discusses the second example under the Performance factor.  The second example