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The US Department of Labor's (DOL) proposal on selecting investments, including private funds, for participant-directed plans will almost certainly increase the use of 3(38) investment managers.

The proposed regulation will, when finalized, materially increase the complexity of selecting investments for 401(k) and private sector 403(b) plans. The introduction of private funds in asset allocation vehicles, such as target date funds, will be part of that complexity. Those changes will mean that plan sponsors will need greater support and, once they appreciate the new responsibilities, will likely want to shift the fiduciary responsibility to the financial professionals who advise them. This can be best accomplished by engaging financial professionals as 3(38) investment managers.

 

Fred Reish, JD is not an employee of Hartford Funds. 

The views expressed here are those of Fred Reish. They should not be construed as investment advice or as the views of Hartford Funds or the employees of Hartford Funds. They are based on available information and are subject to change without notice. The information above is intended as general information and is not intended to provide, nor may it be construed as providing, tax, accounting or legal advice. As with all matters of a tax or legal nature, please consult with your tax or legal counsel for advice. This material and/or its contents are current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Fred Reish.

MFDC070 5873253

About The Author
Fred Reish Headshot
Fred Reish, JD

Fred Reish is an ERISA attorney whose practice focuses on fiduciary responsibility, retirement income, and plan operational issues. He has been recognized as one of the “legends” of the retirement industry by both PLANADVISER magazine and PLANSPONSOR magazine.

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