Fiduciary Duties in Selecting Designated Investment Alternatives

Summary

SIFMA and SIFMA AMG provided comments to strengthen the Department of Labor’s (DOL) proposed rule on Fiduciary Duties in Selecting Designated Investment Alternatives.3 Adopting our comments will enable fiduciaries to better help plan participants attain their retirement savings goals.

Excerpt

I. Executive Summary

SIFMA members support the Department’s goal to adopt an asset-neutral, process-based approach in the proposal. The proposal reflects ERISA’s fundamental principles by emphasizing the importance of a prudent fiduciary process when selecting advisors and investment products, while preserving broad discretion for plan fiduciaries to determine which options best serve the interests of their plans and participants.

We make the following recommendations to the Department to provide plan sponsors and fiduciaries greater flexibility to ensure that their plan participants have access to the investment opportunities they need to meet their retirement goals:

• Improve the safe harbor by further emphasizing fiduciary discretion;
• Harmonize conflict language with other regulatory standards;
• Change liquidity requirements to be asset class neutral;
• Collective Investment Trusts (“CITs”) are well regulated and should receive equal treatment;
• Be clear that the examples are only guideposts; and
• Modernize Class Exemption PTE 77-4.

II. We support the Department’s asset-neutral, process-based safe harbor approach

Helping Americans save for retirement is a core function of our capital markets. But with more companies staying private for longer, private markets have become an important driver of growth and innovation.

Late-stage startups are raising larger amounts of capital in the private markets from a growing pool of traditional and new investors, including dedicated private equity funds, mutual funds, and hedge funds, which has given late-stage companies the ability to continue to raise capital without going public. This trend is apparent in data showing that U.S. companies are remaining private for longer periods: the median age at IPO has increased meaningfully over time (6 years in 1980 vs. 12 years in 2025).4 SIFMA supports broadening access to all categories of investments while also supporting regulatory efforts facilitating companies’ ability to become public. We believe both public and private markets have an important role to play in the capital market system.