The big story in retirement investing is now the Trump administration’s push to have private equity investments added into 401(k) plans. This isn’t really a new story, as I have been writing about it since at least last November, but the intensity – as well as the media coverage – has now ramped up.
If you are new to the story and want to catch up quickly, I have listed below some resources on the issue (most of them my own blog posts and articles on the subject) that should bring you up to speed quickly.
It is important to remember that the executive order represents little more than an early volley in this debate and on this subject. Don’t be fooled by articles suggesting, however, that it is the first step in the process of opening up plans to these types of investments. It is not even close to the first, as financial industry efforts in this regard have been on-going for some time.
It’s also not the last step, though, and there is a lot more to come. I can tell you already, though, where this is going to end up – with private equity investments in plans, likely within target date funds. That is coming and is how this will end – so plan sponsors should start now on the subject of how they are going to best protect themselves against the potential exposures and almost certain litigation risks that will come along with it.
I have a cheat code in mind for how plan sponsors should do that, which I will cover in a later post. For now, though, here is plenty of reading to get started with:
Overview of the issue:
Bloomberg overview on the executive order:
Your Employer Will Decide the Fate of Private-Market 401(k)s
The original idea and why it may not be a good one for plan sponsors, employers and employees:
https://lnkd.in/eZuyCDxz
An ERISA litigator’s view:
https://lnkd.in/eXhkagRi
Best approach to it for plan sponsors/employers:
https://lnkd.in/ebjk8pHZ
Demands on plan sponsors/employers:
https://lnkd.in/erHN3aqQ
How plan sponsors/employers should handle the issue:
https://lnkd.in/eqfcDxYA