BENEFITS DIGEST

The SEC’s examination priorities for 2027 put private-market access, conflicts of interest, cybersecurity and evolving technology on the supervisory agenda. Practitioners quoted in the article read the list as a signal for advisers serving retail investors, including retirement savers moving into less liquid investments. Examination priorities direct the staff’s attention and don’t create new duties by themselves. Advisers and the committees that hire them can use the list to anticipate what examiners will ask about.

Fred Reish continues his series on the Labor Department’s proposed framework for alternative assets in defined contribution plans, reaching the liquidity factor. His point is structural. Participants can trade daily while many alternative vehicles cannot, so a fiduciary has to investigate how a fund bridges that mismatch, and reliance on managers or other fiduciaries must be informed reliance that does not look past contrary information or conflicts. The framework is a proposal, not final law, and the critique is the author’s.

Writing in PLANADVISER, Eversheds Sutherland’s David Kaleda pushes back on the notion that collective investment trusts are unregulated. CITs must be maintained by a bank or trust company under federal or state banking oversight, and ERISA’s fiduciary and prohibited-transaction rules apply when plan assets go in. He argues that the growing use of alternative investments inside CITs makes liquidity, valuation and provider oversight the real diligence work, and he critiques aspects of the Labor Department’s proposed safe harbor along the way.

Specialists from J.P. Morgan, NISA and NEPC tell PLANSPONSOR that the private-assets question for pension plans is one of sizing rather than suitability. A fully funded frozen plan needing 4% to 5% returns and a terminating plan heading toward a risk transfer have very different room for investments that cannot readily be sold, since an annuity purchase consumes liquid assets and can leave the illiquid holdings stranded. The interviews frame allocation size and timing against each plan’s liabilities and liquidity rather than treating private assets as categorically good or bad.

A retirement plan can need cash even when its participants aren’t asking for withdrawals. A termination, recordkeeper change or merger can create demands that an investment’s redemption restrictions make difficult to meet. Fred Reish examines the plan-level liquidity example in the DOL’s proposed investment-selection rule. One proposed path would let fiduciaries rely on an eligible mutual fund’s regulated liquidity program. For other vehicles, including collective investment trusts, the example calls for a written representation or appropriate due diligence about a comparable program, critical review of any representation, and attention to information that calls it into question. The proposal would offer a route to a prudence presumption for this factor, not the only way to satisfy ERISA. A representation would still need to be read and understood, not merely filed.

A week after the Anderson v. Intel argument, Quarles’s appellate and benefits teams predict the Court will affirm the Ninth Circuit and require a meaningful comparison investment in suits over fund performance, with the real question being how much guidance the opinion gives. The lawyers highlight two exchanges from the argument. Justice Kavanaugh observed that half of all funds will always sit below the median. Justice Barrett pressed whether calling an apple an apple requires criteria, suggesting even the plaintiffs had conceded the principle and were only fighting about its content. And the Labor Department’s pending fiduciary proposal already defines a meaningful benchmark for funds holding alternative assets, so sponsors may face the question no matter how the case ends. The firm’s advice is to document the objectives behind each investment selection now.

Fred Reish continues his series on the Labor Department’s proposed rule for selecting investments in participant-directed plans, this time on liquidity at the plan level rather than the participant level. The proposal’s example asks fiduciaries weighing a fund that holds private assets to think about what happens when the plan itself needs to exit the investment, say in a recordkeeper change or a corporate merger, and whether redemptions by other investors could knock the fund off its target allocations. The proposal would treat fiduciaries as prudent if they evaluate the fund’s maximum illiquid allocation, how long a sale would take without giving up value, and the required exit notice. Reish’s caution is that weighing other plans’ redemptions isn’t common practice today and most committees aren’t equipped for it, which points toward delegating the analysis to an investment manager with authority to make the decision.

The SEC has joined the push to put private markets within reach of individual investors, and it said so in as many words. The Commission voted Wednesday to propose what it calls "responsible retailization": letting registered advisers charge performance-based compensation to regulated funds, modernizing interval funds, and giving closed-end funds a rules-based path to multiple share classes. Alongside the proposals, the Commission asks whether passing a FINRA-developed exam, or holding a CPA license, CFA charter, or CFP certification, should qualify someone as an accredited investor without meeting any income or net worth test. Chairman Paul Atkins tied the package directly to the President's executive order on alternative assets in 401(k) plans, calling it a complement aimed at post-tax dollars. The comment windows run 60 days from Federal Register publication, and they are where concerns about valuation, liquidity, and fees get raised.

House and Senate Democrats have released letters asking the Justice Department and the FBI to investigate roughly 12,000 suspected fraudulent comments supporting the Labor Department's proposed safe harbor for alternative assets in 401(k) plans. The letters from Ranking Members Bobby Scott, Jamie Raskin, and Bernie Sanders, previously reported but only now posted in full, invoke the federal false statements statute. Scott and Sanders separately ask the department's Inspector General for an audit, and Scott urges Acting Secretary Sonderling to investigate and withdraw the rule. [Wealth Management's coverage](https://www.wealthmanagement.com/regulation-compliance/lawmakers-demand-probe-into-fraudulent-401k-comments) recounts the Bloomberg reporting behind the letters, including supportive comments attributed to people who had died.

Invesco's summer survey of 517 DC participants found interest running ahead of understanding. Asked to identify private-market asset types, participants averaged 3.4 of 5. Seventy-eight percent flagged private equity, but only 41 percent recognized commercial real estate, and 28 percent called cryptocurrency a private asset. Ninety-three percent understood the higher-fee, potentially-higher-return trade-off. What would help, participants said: clearer risk and return explanations (43 percent) and real-world examples, and 65 percent expressed interest in a target-date fund with a modest private-markets allocation. Employees may need basic explanations of these investments before choosing them.

ERISA attorney Fred Reish, quoted from a webinar this week, expects the Labor Department's alternative-assets rule to become final and effective toward the end of the first quarter of 2027 despite the fight over the comment file. In letters sent September 17, Representatives Bobby Scott and Jamie Raskin and Senator Bernie Sanders asked Attorney General Todd Blanche and FBI Director Kash Patel to investigate nearly 12,000 apparently manufactured comments supporting the rule. Companion letters seek a Labor Department inspector general audit and press Acting Secretary Keith Sonderling to look himself.

CFA Institute's modeling found that private equity and venture capital offered the strongest potential to grow retirement balances. Private debt, infrastructure, and real estate produced lower average returns and played a more defensive role. Changing how a target-date fund adjusts its investments during the final decade before retirement affected outcomes more than the private-market allocation itself. The findings suggest that choosing how these investments fit into a fund matters more than simply making them available.

Two data points for the debate the comment file above was supposed to inform. CFA Institute modeled private equity, private debt, infrastructure, real estate, and venture capital inside target-date glide paths and reached a two-sided result: funds with private equity allocations generally produced higher average retirement balances, but a 10 percent allocation didn't materially change where a participant lands over a working career, and contribution rates and time in the plan mattered more than the allocation. “Opening access is not the same as improving retirement outcomes,” the institute's Olivier Fines said. Participants, meanwhile, sound willing: Invesco's summer survey of 517 large-plan participants found 58 percent view the higher-fee, higher-potential-return trade-off favorably and 65 percent would rather reach private markets through a target-date fund than pick the assets themselves.

The series on the DOL's alternative assets proposal reaches its third performance benchmark example, a target date fund holding only publicly traded securities. The fiduciary in the example builds a custom composite benchmark blending broad indices to match the fund's asset allocation, reviews it analytically, and compares performance component by component rather than in the aggregate, down to matching a 10 percent small cap growth sleeve with a 10 percent small cap growth index. The practical point is candid. This example is the easiest case the proposal will ever present, a fund holding nothing but publicly traded securities, and building a meaningful benchmark for it is already a heavy lift. Once private assets enter the mix, the lift gets heavier.

Written for public plans but useful to any defined benefit sponsor nearing the finish line. With the aggregate state pension funded ratio at 78.8 percent for fiscal 2025, up from 76.7 percent a year earlier, more systems are within sight of full funding, and Segal's point is that arriving is not the same as being done. The roadmap holds four disciplines. Assumptions get set for long-term stability rather than surplus-flattering optimism. Contribution rates get a glide path for the cliff that arrives when the amortization payments drop off. Benefit enhancements meet the caution the pre-2000 bull market taught, and asset allocation gets recalibrated for negative cash flow, with less in illiquid holdings.

The long-running alternative-assets series reaches the proposal's liquidity factor, and the reading is more permissive than sponsors might expect. The DOL's proposed regulation lists six factors for vetting alternatives in participant-directed plans; on liquidity, it says a prudent process may sacrifice some plan or individual level liquidity in pursuit of additional risk adjusted return. The analysis runs on two levels: participant liquidity, where daily trading will remain the practical demand, and plan liquidity, where the question is how hard an option is to remove once chosen. The prediction is that private fund allocations will arrive mostly inside target date funds, which can pair daily participant trading with a 60 to 90 day removal window.

Wilshire's Todd Cassler says product development has outrun implementation, and names four bottlenecks: liquidity management, valuation for infrequently traded assets, recordkeeping built for daily valued funds, and committee governance that can document why private markets belong at all. He is candid about the adviser education gap, and poses a useful alignment test—whether asset managers pitching private markets offer them in their own employees' plans.

The twentieth installment of Reish's series on the DOL's alternative assets proposal reaches the hardest benchmarking case, an asset allocation fund holding private equity alongside public securities. The proposal expects a meaningful benchmark that blends broad market indices for the traditional sleeve with the methodologies investment professionals actually use for the private sleeve, such as internal rate of return and public market equivalents. His warning lands on the same phrase Toth examines above. Fiduciaries who receive an adviser's benchmark recommendation must read, critically review, and understand it before adopting it as their own, because blind reliance will not support compliance. He notes the final rule could be out and effective in the first quarter of 2027.

Why did public pension plans take alternatives from 14% to 39% of their risky assets over two decades? The Center for Retirement Research finds the driver was belief rather than desperation. Consultant recommendations and peer behavior explain the shift, funding status and return targets barely register, and a 10 point rise in neighboring plans' alternative allocations predicts a 7.2 point rise in a plan's own.

A PGIM manager makes the industry case that private credit's long-term structure aligns with retirement investors' horizons, the latest in the push to move private assets into defined contribution menus.

The Insured Retirement Institute urged the Senate to take up the Retirement Fairness for Charities and Educational Institutions Act, which would give 403(b) plan participants access to collective investment trusts, an option long available to 401(k) plans at lower cost than comparable mutual funds.

The DOL's proposed regulation on selecting investments, including alternative assets, identifies six factors relevant to selecting investments for participant-directed plans such as 401(k)s; this post is the second in a series examining those factors, focusing on performance benchmarking.

Mayer Brown makes the affirmative case for collective investment trusts in defined contribution plans: how CITs are regulated, why their costs run lower than comparable mutual funds, and what fiduciaries should document when adopting them.

Twenty years after the Pension Protection Act made target-date funds the default, Sway Research maps a $5.3 trillion TDF market shifting toward collective investment trusts and retirement-income features.

Fred Reish's series on the DOL's alternative-assets proposal reaches the performance-benchmark factor: what the proposed regulation would require fiduciaries to consider when benchmarking alternatives inside participant-directed plans.

Transactions involving an ESOP shareholder, and an ESOP trustee serving as fiduciary for participants, create complexity a private equity buyer will not find in non-ESOP deals. Foley maps the terms and issues unique to these acquisitions.

Continuing his close read of the DOL's proposed regulation on selecting investments for participant-directed plans, Reish examines the complexity factor among the six the proposal defines for evaluating any investment, alternative assets included, in 401(k) and private-sector 403(b) lineups.

Witnesses testifying before a Senate panel urged lawmakers to pass legislation allowing 403(b) plans to invest in CITs. They also expressed support (and caution) for the DOL's Investment Selection Rule.

Today, plan sponsors face a changing environment, where industry consolidation, private equity ownership, proprietary product development, and participant monetization strategies are creating new fiduciary challenges.

Lawmakers found bipartisan ground on retirement-plan and small-business financing reform, but split sharply over private markets, crypto oversight and risks facing ordinary investors.

The DOL’s proposed prudence safe harbor regulations have pretty much made it “table stakes” for some responsible person somewhere to read and understand any annuity contracts on behalf of the plan which are provided as part of any DC lifetime income program.

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.

Operational bottlenecks are drawing renewed scrutiny as Congress considers opening the $1 trillion 403(b) market to collective investment trusts.

Changes in plan design, coupled with regulatory improvements and market evolution, mean concerns about collective investment trusts should no longer keep them from 403(b) plans.

The spinoff firm will focus on retirement, insurance and payroll services, with backing from private equity firm New Mountain Capital.

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.

Defense and aerospace company ATI won dismissal of a proposed class action alleging it put retirees' benefits at risk by transferring approximately $1.5 billion of pension obligations to a private equity-backed insurance company, with a Pennsylvania federal court ruling Monday that the ex-workers hadn't sufficiently pleaded their claims.

Recent analysis projects private capital could make up 6% of assets in defined contribution plans by the end of the decade, driven by gradual adoption through target-date funds, collective investment trusts and the DOL’s proposed safe harbor for fiduciaries.

While the firms' first jointly developed investment solutions target wealthy investors, an under-the-radar detail in Wednesday's announcement signals plans to expand the strategic alliance into retirement-focused products—potentially bringing more private market solutions to workplace retirement plans.

Congress is once again considering legislation that would allow 403(b) retirement plans to invest in Collective Investment Trusts (CITs).

If you are considering selling your business, you may often believe that the only available option is selling to an unrelated third-party buyer, such as a competitor or a private equity fund.

Registered investment advisers have gained access to ne w investments such as Voya’s V-ALT collective investment trusts.

The firm says offering the investments will help participants diversify their portfolios as many near retirement

As we previously reported, following an executive order issued by the Trump Administration last year, there has been a recent trend encouraging access to alternative assets through retirement

Analysis of nearly 58,000 retirement plans over 16 years concludes that defined contribution plans without alternative investments delivered higher returns than defined benefit plans with significant