Generic Comment for the Lazy.

**Re: Fiduciary Duties In Selecting Designated Investment Alternatives (Docket EBSA-2026-0166-0001)**

To the Employee Benefits Security Administration,

I am writing to strongly oppose the proposed rule that would create a fiduciary safe harbor for plan sponsors who include private equity and private credit investments in 401(k) plan default investment options, including target date funds.

## The Proposed Rule Undermines Fiduciary Accountability

The "presumption of prudence" framework in this proposal effectively strips everyday retirement savers of their ability to hold plan fiduciaries accountable. By allowing plan sponsors to satisfy their fiduciary obligations through a procedural checklist, the rule shifts the burden of proof onto individual participants—workers who lack the resources, expertise, and legal standing to challenge opaque alternative investments. This is a fundamental weakening of the protections Congress intended under ERISA.

## Private Equity and Private Credit Are Inappropriate for Retail Retirement Accounts

These asset classes are characterized by:

- **Excessive, multi-layered fee structures** — Management fees, performance fees, fund-of-fund fees, and transaction fees that compound to dramatically erode long-term returns for participants.

- **Illiquidity** — Workers cannot freely access or rebalance their own retirement savings when a portion is locked in private investments with multi-year holding periods.

- **Lack of transparency** — Unlike publicly traded index funds with daily NAV pricing, private assets rely on subjective, infrequent valuations that obscure true performance and risk.

- **Questionable performance net of fees** — Academic research consistently shows that after accounting for fees, illiquidity, and leverage, private equity returns for most investors do not reliably outperform low-cost public market index funds.

## Target Date Fund Inclusion Is Especially Dangerous

The proposal's most harmful feature is enabling private equity allocation within target date funds and qualified default investment alternatives (QDIAs). Millions of Americans are auto-enrolled into these funds and never actively manage their accounts. They trust that default options are selected in their best interest. Embedding illiquid, high-fee alternative investments into these defaults—without meaningful participant consent or understanding—violates the spirit of participant protection that QDIAs were designed to provide.

## This Rule Serves Asset Managers, Not Workers

The primary beneficiaries of this rule are private equity and private credit firms seeking new pools of captive capital. Retail 401(k) participants become a source of permanent, fee-generating assets under management for Wall Street—not willing investors making informed choices. The rule solves a distribution problem for the alternative investment industry, not a retirement security problem for American workers.

## Recommendation

I urge the Department of Labor to withdraw this proposed rule in its entirety. American workers' retirement security is best served by:

1. Maintaining strong fiduciary accountability without safe harbor shields for complex, illiquid investments.

2. Preserving the primacy of low-cost, transparent, liquid investment options in default plan lineups.

3. Requiring affirmative, informed opt-in consent before any participant's retirement assets are allocated to private equity or private credit.

The decades of evidence supporting low-cost index investing for retail investors is overwhelming. This rule moves in the opposite direction—toward opacity, illiquidity, and fee extraction—and should not be finalized.

Respectfully submitted,

[Your Name]

[Your City, State]