Alternative Investments and Beyond: The DOL Safe Harbor for 401(k) Fiduciaries

Worldwide Employee Benefits Network [WEB] - New York Chapter

The Department of Labor has responded to President Trump’s August 2025 Executive Order on alternative investments by issuing proposed regulations that would establish a new safe harbor under ERISA governing the selection of investments for 401(k) plans.

The proposed rule provides a road map for fiduciaries of defined contribution plans to follow a prudent process when evaluating and selecting investments - including alternative investments such as private equity, real estate and cryptocurrency.

While alternative investments have long been utilized by defined benefit plans to manage volatility and enhance returns, they have historically had limited adoption in defined contribution plans. These proposed regulations signal a significant shift in regulatory posture and could reshape fiduciary decision-making for plan sponsors and their advisors.

Our panelists will address the following:

• Separating fact from fiction: common misconceptions about alternative investments and the proposed safe harbor
• The prudent process framework: what the proposed regulations require and how fiduciaries can comply
• Types of alternative investments and key considerations for evaluating each
• Evaluating fees-what is reasonable?
• Direct v. indirect investments
• The role of professionally managed investment options, including target-date funds
• Best practices for documenting fiduciary decision-making
• The Supreme Court’s forthcoming consideration of meaningful benchmarks
• How much weight will courts give to compliance with the safe harbor? 

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