Department of Labor Issues Groundbreaking 401(k) Guidance to Groom

WASHINGTON, June 3, 2020 /PRNewswire/ -- Today, the U.S. Department of Labor ("DOL") issued important new guidance for 401(k) plan investment committees that want to include private equity as a component of a target date fund or other diversified investment fund offered within a 401(k) plan. The Information Letter – issued to Groom Law Group, Chartered ("Groom") principal Jon Breyfogle – marks the first time DOL has addressed the use of private equity in defined contribution retirement plans. 

"For decades, institutional investors like traditional pension plans and endowments have invested in private equity, but 401(k) plan fiduciaries have been reluctant to add the asset class to their plans in the absence of specific guidance from DOL," said Jon Breyfogle.  "The Information Letter released today is important because it gives fiduciaries more legal certainty if they want to consider additional asset classes as part of a diversified 401(k) investment option."  

To read Groom's summary of the guidance, click here.

About the Information Letter

The Information Letter confirms that plan fiduciaries can prudently offer private equity as part of a diversified investment option, such as a target date fund, within a defined contribution plan.  The Information Letter assists plan fiduciaries by providing a detailed guidance on the important considerations for demonstrating a prudent process when considering private equity investments. 

About Groom Law Group, Chartered

Groom is an award-winning law firm that solves complicated legal issues for plan sponsors, health insurers, financial institutions, retirement services providers, and the public sector.  Since our founding  in the wake of ERISA's passage, Groom's rapid response to shifts in the employee benefits, retirement and health care policy paradigm has been our calling card.  In a world that moves as swiftly as the evolution of benefits law, versatility and willingness to adapt have become core tenets of our practice at Groom.  With over 80 attorneys, Groom's benefits, retirement services and health industry practices are among the largest in the United States. 

SOURCE Groom Law Group, Chartered

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