If Participants Don’t Understand It, Should It Be in Your 401k Plan?
Michelle Capezza was quoted in a Fiduciary News article examining whether increasingly complex investment options, such as private equity and other alternatives, belong in participant directed 401(k) plans. The article explores this issue against the backdrop of proposed Department of Labor regulations that continue to emphasize a process based fiduciary standard.
Michelle explains that current rules do not require plan sponsors to assess whether participants understand an investment, noting, “The emphasis thus far has been on providing plan fiduciaries with a process driven approach that would enable them to demonstrate prudent selection and monitoring of alternative investments … rather than imposing a duty to assess the level of plan participants’ understanding of these investments.”
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