Department of Labor Provides Guidance on Private Equity Investments in Individual Account Plans
On June 3, 2020, the Department of Labor (“DOL”) issued a letter (“Information Letter”) clarifying that fiduciaries of individual account plans (such as 401(k) plans) could include, as an investment option, a managed asset allocation fund (e.g., a target date fund, target risk fund, or balanced fund) (a “Managed Asset Allocation Fund”) that includes a private equity component. This is a significant first step toward giving 401(k) plan participants access to potentially higher return investment opportunities not typically available in these plans.