Given those differences, the letter lays out certain considerations for defined contribution fiduciaries to consider before including a private equity option in allocation, including:

The risks and benefits associated with the private equity investment alternatives along with range of expected returns net of fees and diversification of risks over a multi-year period
The ability of plan fiduciaries to evaluate and monitor private equity investments or choose an investment consultant or a delegated investment manager for that task
The percentage of the investment option to be invested in the private equity component
The liquidity component of private equity to manage participant-directed deposits and withdrawals and whether any potential liquidity restrictions align with the plan participant population, in terms of age, turnover and contribution and withdrawal patterns
The adequacy of disclosures provided to plan participants concerning the character and risks of the investment options, including a private equity component.

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DOL gives green light for private equity in 401(k)s

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