Fiduciary Due Diligence for Private Equity in 401k Plans
Of Counsel Michelle Capezza was quoted in a Fiduciary News article about the ERISA fiduciary framework for including private equity offerings in 401k plans. The article addresses the due diligence responsibilities plan sponsors must consider as private equity is increasingly used as a plan diversification tool.
"The Department of Labor issued Information Letter 2020-06-03 … which stated that a plan fiduciary can offer a professionally managed asset allocation fund with a private equity component as a designated investment alternative in an individual account plan such as a 401k plan,” Michelle explains. She adds that, among other considerations, plan fiduciaries, “should consider the plan demographics and plan features and determine whether the investment alternative aligns with participant needs, and whether the participants will be furnished with adequate information regarding the investment alternative to enable them to make informed decisions.”
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