DOL Proposes 401(k) Investment Selection Framework, Clarifies Path for Alternatives
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Article Summary
Discussing the proposed DOL regulation that would create guidelines for including alternatives like private equity and private credit in 401(k) plans. We cover the potential impact and OneDigital's perspective.
The proposed regulation affirms plan sponsor discretion while prioritizing participant outcomes.
What Happened
On March 30, 2026, the DOL’s Employee Benefits Security Administration (EBSA) issued a proposed regulation clarifying how plan fiduciaries can evaluate investments, including alternatives like private equity and private credit. The DOL's message: plan sponsors have full discretion to choose what's best for their participants. No asset class is favored or discouraged.
The proposal introduces a process-based safe harbor built on six factors: performance, fees, liquidity, valuation, benchmarks, and complexity. Fiduciaries who follow a documented evaluation framework around these criteria could receive a "presumption of prudence.” Meaning plaintiffs would need to prove imprudence rather than fiduciaries having to defend every decision.
This is a proposed rule, not final regulation. The safe harbor and its protections are not yet in effect. Final rules may differ following the public comment period.
Why it Matters
For plan sponsors: This proposed safe harbor could reduce litigation exposure for fiduciaries acting in good faith. A clear, documented process would no longer just be best practice — it could be a legal shield.
For participants: This is about access. Alternatives have historically been reserved for institutions and the wealthy. When appropriate, these tools could improve diversification and strengthen long-term retirement outcomes for American workers.
Our Perspective
At OneDigital, we believe everyone deserves access to the tools that support long-term financial security, not just large institutions and ultra-wealthy.
That's why we’ve been at the forefront of offering private investment solutions to qualified retirement plans, guided by a process built around these same six factors. For us, protecting plan sponsors and improving participant outcomes go hand in hand.
For plan sponsors with a documented process, these strategies are already within reach. This proposal would formalize the framework and could offer additional fiduciary protections down the road.
What's Next
The proposed rule is open for public comment. We're closely monitoring the rulemaking process and here to help you navigate what comes next.
Want to Read More About OneDigital and Private Investments? Check out this announcement, "OneDigital Introduces Private Investments within Personalized Portfolios for Defined Contribution Plans."
Investment advice offered through OneDigital Investment Advisors LLC.
This material has been prepared for informational and educational purposes only. It is not intended to provide and should not be relied on for legal or investment advice and are not applicable to any organization’s individual circumstances. You should consult your own legal or investment advisors before engaging in any transaction. Additionally, any statements made reflect our views, are not intended to guarantee any particular result, and do not constitute an offer or solicitation in any jurisdiction.
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