Anne Tergesen

What's new here is that the Labor Department provides sort of a legal framework that spells out for employers how they can add private investments and other alternatives to their plans, steps that they need to take to adequately vet these investments to qualify for what they're saying should be a safe harbor or sort of protection from litigation.

So, you know, they say that these private investments have long been available to elite investors like pensions and endowments and the wealthy.

And they also make an argument that there are just fewer publicly traded companies to invest in now.

more companies are remaining private for longer.

So they're just saying that 401k investors also deserve the option to have access to a growing slice of the economy.

So plaintiff's attorneys are big critics of this.

They don't like the thought of having litigation restricted, but there's also consumer rights groups.

And they argue that these are illiquid,

often opaque investments, and that they have higher fees.

So that the argument that private investments are going to actually help 401k investors just doesn't hold up.

And the Treasury Department has expressed some concern about certain aspects of private credit.

Treasury Secretary Scott Vessant was concerned that the regulations might make it easy for fund managers to just stick 401k funds

investors with underperforming private credit investments.

And so he wanted some kind of guardrails in there.

401k plans have a fiduciary obligation to vet investments.

And they take that fiduciary obligation very seriously.

And nothing moves quickly in the 401k world.

So 401k plans are going to have to really kick the tires on these things.