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A Superior Collective Investment Trust Onboarding Experience.
A Superior Collective Investment Trust Onboarding Experience.
By Jason Levy – Sr. Counsel at Great Gray
Amid Executive Order Buzz, One Standard Still Guides Plan Lineups
Retirement plan stakeholders continue to ask whether a forthcoming Executive Order or related Department of Labor (DOL) action will bring new clarity around investment options that include private assets in defined contribution (DC) plans.
With the launch of our Panorix Target Date Series (Panorix), it’s a timely and important topic, but also one where the fundamentals haven’t changed. To learn more about Panorix, watch our webinar.
No New Action Needed to Clarify Fiduciary Responsibility
While there is growing attention around the expected Executive Order and speculation about further DOL guidance, we believe neither is necessary to inform fiduciary decision-making. These developments may offer directionally helpful commentary, but they are unlikely to change the legal framework that already exists.
The ERISA Standard Is Clear
Under ERISA, the standard for selecting investment options within a plan lineup is both strict and well established. Fiduciaries must act solely in the interest of plan participants, with the exclusive purpose of maximizing risk-adjusted returns, net of fees.
That principle applies universally, regardless of whether an investment includes public or private market assets.
What This Means for TDFs with Private Market Exposure
If a responsible fiduciary conducts a prudent evaluation process and reasonably determines that a target date fund (TDF) with private market components meets the ERISA standard, that option may be added to the plan. Put simply, the legal clarity already exists.
Fiduciaries Can Move Forward with Confidence
At Great Gray, we believe in cutting through the noise and focusing on what matters most: acting in the best interest of participants. While regulatory developments are worth monitoring, they do not change the core responsibility fiduciaries already understand and uphold. The standard is clear, and strong processes – not headlines – should continue to guide prudent decision-making.
Please click on this link for important information about Panorix Target Date Series.
Great Gray Trust Company, LLC Collective Investment Funds (“Great Gray Funds”) are bank collective investment funds; they are not mutual funds. Great Gray Trust Company, LLC serves as the Trustee of the Great Gray Funds and maintains ultimate fiduciary authority over the management of, and investments made in, the Great Gray Funds. Great Gray Funds and their units are exempt from registration under the Investment Company Act of 1940 and the Securities Act of 1933, respectively.
Investments in the Great Gray Funds are not bank deposits or obligations of and are not insured or guaranteed by Great Gray Trust Company, LLC, any bank, the FDIC, the Federal Reserve, or any other governmental agency. The Great Gray Funds are commingled investment vehicles, and as such, the values of the underlying investments will rise and fall according to market activity; it is possible to lose money by investing in the Great Gray Funds.
Participation in Collective Investment Trust Funds is limited primarily to qualified retirement plans and certain state or local government plans and is not available to IRAs, health and welfare plans and, in certain cases, Keogh (H.R. 10) plans. Collective Investment Trust Funds may be suitable investments for plan fiduciaries seeking to construct a well-diversified retirement savings program. Investors should consider the investment objectives, risks, charges, and expenses of any pooled investment fund carefully before investing. The Additional Fund Information and Principal Risk Definitions (PRD) contains this and other information about a Collective Investment Trust Fund and is available at www.greatgray.com/cit-fund-info/principal-risk-definitions/ or ask for a free copy by contacting Great Gray Trust Company, LLC at (866) 427-6885.
Great Gray® and Great Gray Trust Company are service marks used in connection with various fiduciary and non-fiduciary services offered by Great Gray Trust Company, LLC.