June 9, 2020
On June 3, 2020, the U.S. Department of Labor (DOL) issued an information letter intended to provide clarity about how ERISA fiduciary duties apply to including alternative investments as they do to more-typical investments in defined contribution (DC) plans. The guidance is an effort to make it clear that ERISA does not prohibit alternative investment in DC plans, and therefore a fiduciary could, if it follows a prudent process, decide to allocate a portion of a target date fund (TDF) portfolio to alternative investments.
The Georgetown Center for Retirement Initiatives (CRI) released reports analyzing the strategic use of alternative assets in a TDF structure and how to address various operational challenges, demonstrating that including these asset classes can improve expected retirement income and mitigate loss in downside scenarios. However, many plan fiduciaries have been reluctant to include alternative assets allocations in their TDFs because of a perception that doing so could increase the risk of litigation. The DOL’s guidance is an effort to respond to this concern.
During this one-hour webinar, experts and the leaders of several key industry associations will discuss the DOL’s new guidance to provide some much-needed clarity about the use of alternative assets in DC plans. What do we know about the potential for asset diversification to improve returns, smooth volatility, and mitigate downside risks during periods of market stress, such as the recent coronavirus-induced economic volatility? Does the latest guidance help address the key legal and operational challenges that have slowed adoption? Will the DOL’s action increase the likelihood that plan sponsors can take more of an institutional approach to DC investing?
Presenters:
- Jonathan Epstein, Executive Director, Defined Contribution Alternatives Association (DCALTA)
- Douglas Keller, Head of Private Wealth, Pantheon
- David O’Meara, Senior DC Strategist, Willis Towers Watson
- Lew Minsky, President & CEO, Defined Contribution Institutional Investment Association (DCIIA)
- Sara Shean, Co-Chair, Defined Contribution Real Estate Council (DCREC)
- Dennis Simmons, Executive Director, Committee on Investment of Employee Benefit Assets Inc. (CIEBA)
Moderator: Angela Antonelli, Research Professor and Executive Director, Georgetown University Center for Retirement Initiatives