Expanding Access to Alternative Investments in ERISA Plans—Litigation Risks and Practical Considerations

On this Ropes & Gray podcast, ERISA and benefits partner Sharon Remmer is joined by litigation & enforcement partners, Amy Roy and Dan Ward, to discuss President Trump’s recent Executive Order that directs the U.S. Department of Labor and other federal agencies to expand access to alternative assets for 401(k) investors and what the potential ramifications could be for retirement plan sponsors and asset managers from a litigation risk perspective. We have been closely monitoring the significant increase in lawsuits targeting 401(k) and 403(b) retirement plans over the last several years, where plaintiffs have alleged fiduciary defects in the prudence of investment menu design as well as with respect to the monitoring of plan service providers and fees. Using this as a backdrop, our team examines the evolving landscape and how recent case law clarifies key points for plan sponsors to consider should they decide to offer private equity and other alternative assets in their menus. Our speakers discuss practical steps for mitigating risk when offering alternative investments, such as conducting thorough due diligence, providing clear participant disclosures, and maintaining robust documentation of investment decisions.