On March 31, the U.S. Department of Labor proposed a rule that would further open private markets to participant-directed defined contribution (DC) plans by establishing a process-based safe harbor governing fiduciary duties in the selection of designated investment alternatives. The proposed rule is the latest development intended to expand private market access within retirement plans and more broadly across retail investors
With the size of DC plans in the U.S. at nearly $14T, the increased inflows into private markets has the potential to impact institutional Limited Partners (LPs) and the broader private markets industry in meaningful ways.
The proposed process-based safe harbor focuses on six main factors:
- Performance
- Fees
- Liquidity
- Valuation
- Benchmarking
- Complexity of the investment
By clarifying how fiduciary decision-making will be evaluated, the proposal seeks to reduce regulatory burden and litigation risk while preserving flexibility across investment types.
A new ILPA analysis outlines the implications the proposed rule may have on LPs and market health more broadly.
What’s Next on this Topic
As part of our ongoing work on developments with retail capital on behalf of our member LPs, ILPA is in the process of drafting a comment letter in response to the proposed rule and will keep members informed of the latest updates. Comment letters are due on June 1, 2026. Please reach out to industryaffairs@ilpa.org with any questions or comments.
