The U.S. Department of Labor has issued guidance stipulating that business owners with 401(k) plans can officer funds with a private equity component to their employees.
“This Information Letter will help Americans saving for retirement gain access to alternative investments that often provide strong returns,” said Eugene Scalia, U.S. Secretary of Labor.
Private equity investments have long been part of the investment portfolios used by defined benefit plans to fund retirement benefits for many American workers, but they generally have not been incorporated into investment funds used by defined contribution plans, such as 401(k) plans. Rather, 401(k) plans generally use mutual funds, bank collective investment trusts, and insurance company pooled accounts with portfolios focused on publicly traded stocks and bonds. The Information Letter addresses private equity investments offered as part of a professionally managed multi-asset class vehicle structured as a target
