ASA Submits Comments to DOL Supporting Proposed Fiduciary Rule for Alternative Investments in Retirement Plans

WASHINGTON – The American Securities Association (ASA) today submitted comments to the Department of Labor (DOL) in support of its proposed rule to establish a six-factor, process-based safe harbor for plan fiduciaries selecting designated investment alternatives, including those with exposure to alternative assets, for participant-directed defined contribution plans.

"ERISA's prudence standard has never cared whether an investment is traditional or alternative, it cares whether the fiduciary did their job properly. This Proposal finally puts that principle in writing," said ASA President and CEO Chris Iacovella. “For too long, litigation risk has been the real gatekeeper locking retirement savers out of alternative investments, not ERISA. This Proposal can change that, but only if the final rule makes clear the presumption of prudence kicks in before a case ever gets to trial.”

ASA's comments support the proposed asset-neutral framework and offer recommendations to strengthen the rule, including clarifying that the presumption of prudence operates at the pleading stage of litigation, adopting a total-cost standard for fee evaluation, confirming context-sensitive liquidity and valuation standards, and coordinating with the SEC and FINRA to create a harmonized regulatory pathway.

To read ASA's full comment letter, click here.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.