By Chris Tobe, CFA, CAIA | The CommonSense 401k Project

Fred Reish, one of the leading attorneys advising retirement plan fiduciaries, deserves credit for explaining an issue the investment industry too often buries beneath sales presentations: liquidity.

His October 12 article draws a useful distinction. Under the Department of Labor’s proposed investment regulation, SEC-registered open-end mutual funds offer a straightforward route to the protection addressing plan-level liquidity because of their required liquidity risk management programs. Collective investment trusts require additional investigation and review. Reish also recognizes the danger that reliance on provider representations can become a box-checking exercise. Fred Reish

That is excellent practical guidance—and an invitation for plan sponsors to ask harder questions.

The protection he discusses is proposed and limited to this liquidity issue. It is not blanket immunity for selecting a mutual fund. But the practical lesson is compelling: the mutual-fund framework already supplies a protection that sponsors choosing other vehicles must investigate themselves.

The committee needs an exit, too

The DOL proposal identifies plan terminations, recordkeeper changes, and corporate transactions as potential sources of substantial redemption demands. It also recognizes that withdrawals by other investors can disrupt a pooled vehicle’s allocation. These are operating concerns that committees need to examine before investing. govinfo.gov

A retirement committee should ask a plain question before buying any complicated investment:

If we decide this manager should be fired, how do we get our money back?

A participant’s ability to make an ordinary withdrawal does not answer whether the employer can move the entire plan’s investment.

Consider a hypothetical target-date CIT that accommodates normal withdrawals using incoming contributions and publicly traded holdings. The arrangement may function comfortably until a large employer leaves, several plans redeem together, or a market decline coincides with rising withdrawals.

The committee needs to understand what happens then. Who can delay payment? What notice is required? Can withdrawals be capped? What assets get sold first? Who bears the cost?

A marketing promise of liquidity is only as useful as the contracts and assets supporting it.

The target-date label does not answer the liquidity question

My concern is especially acute when private equity, private credit, or restrictive insurance contracts sit inside target-date CITs.

A retirement-year label tells the committee almost nothing about the enforceable withdrawal terms of the underlying investments.

The committee should demand a complete explanation of how the outer fund’s redemption promises fit the underlying contracts. If one layer offers frequent withdrawals while another can hold capital for years, someone must explain how that mismatch is managed—and who bears the consequences if the assumptions fail.

Here is a simple hypothetical. A portfolio begins with $90 in liquid assets and $10 in illiquid assets. Investors redeem $40, paid entirely from the liquid holdings. The remaining portfolio contains $50 in liquid assets and the same $10 in illiquid assets.

The illiquid allocation has risen from 10% to approximately 16.7%, without buying another dollar of private investments.

The people who remain now hold a different portfolio. A committee should want to know whether the manager has tested that situation before workers experience it.

Smooth accounting can hide the problem

In my recent “Target-Date Fund Risk Games” article, I explained how delayed private-asset valuations can depress measured volatility and distort correlations. That concern belongs directly beside the liquidity analysis. The CommonSense 401k Project

A model may praise an allocation for its smooth reported returns while overlooking the difficulty of selling it at its stated value. Publishing a daily fund price does not prove that every underlying holding has been freshly valued or can be converted into cash at that price.

Consultants should have to explain both the valuation assumptions behind their risk charts and the withdrawal assumptions behind their liquidity claims.

Otherwise, a committee can be sold an investment as “safer” precisely because its accounting recognizes market stress slowly, while its contracts make responding to that stress more difficult.

Follow the contracts through every layer

My “Who Is Your Regulator?” article makes the related transparency argument: the committee needs to see through the investment’s outer wrapper. Banking supervision of a CIT trustee does not make the structure identical to an SEC-registered mutual fund or answer every question about its underlying contracts. The CommonSense 401k Project

The relevant questions reach every material underlying fund, partnership, and insurance contract.

Congress should require a standardized Form 5500 attachment identifying those layers, their regulators, material withdrawal restrictions, valuation methods, and the costs of exit. Providers should have to supply the information. Committees should document their review.

Workers should not need litigation to discover where their retirement money can become trapped.

The easiest route deserves serious consideration

My conclusion from Reish’s analysis is straightforward: for sponsors seeking a simpler, more transparent liquidity review, SEC-registered mutual funds offer an obvious place to start.

A CIT can have a legitimate investment rationale. The sponsor should still demand a concrete explanation of its benefits after accounting for fees, transparency, withdrawal rights, and the additional work required to evaluate them.

A lower advertised expense ratio cannot settle that comparison if the committee has not examined the underlying costs and restrictions.

Reish deserves praise for making the distinction clear. Committees should act on it.

Before putting workers into a more complicated structure, explain why the benefits justify the complications—and show exactly how the money gets out.

By Christopher B. Tobe, CFA, CAIA | The CommonSense 401k Project

I support considering environmental, social and governance factors when they help protect retirement savers. Climate exposure, workforce practices, conflicts of interest and corporate accountability can affect investment results. Fiduciaries should examine those risks.

But ESG has become a political football. Republicans attack the E and S. Democrats celebrate them. Too often, both sides ignore the G—and Wall Street collects the fees.

Governance means opening the books, controlling conflicts, verifying performance, understanding liquidity and protecting participants from excessive costs. An investment does not become well governed because its manager signs a sustainability pledge. Nor does it become prudent because a politician calls it “anti-woke.”

The Trump Department of Labor deserves especially sharp criticism. Its alternative-investment agenda would expand access to expensive, opaque structures while offering fiduciaries additional protection from litigation. That is a peculiar way to put workers first.

Trump’s DOL attacks the label while opening the door to the products

President Trump’s August 7, 2025 executive order directed the DOL to facilitate alternative investments in retirement plans, consider safe harbors and prioritize actions to curb ERISA litigation. The department rescinded its 2021 supplemental private-equity caution on August 12, 2025.

The March 2026 investment-selection proposal would establish a process-based prudence safe harbor. It identifies performance, fees, liquidity, valuation, benchmarking and complexity as factors for review.

Those are legitimate subjects. The problem is what counts as an adequate answer—and how much protection the government would give fiduciaries who accept the industry’s answers.

The proposal’s fee framework considers not only risk-adjusted expected returns but other “value,” including benefits, features and services. I see a dangerous opening: high fees can be defended through a growing collection of claimed benefits that are difficult for participants to measure.

Will workplace sales access be repackaged as financial education? Will proprietary-product marketing become participant engagement? Will a consultant’s endorsement help turn an expensive investment into a supposedly valuable service package?

Those are risks the DOL should close off explicitly. A sales opportunity for a provider is not automatically a benefit for a worker.

The department should demand stronger evidence before workers’ money enters opaque products. Instead, this proposal risks making a documented process a shield for accepting weak evidence.

Pro-ESG and anti-ESG can be the same business strategy

The administration’s hostility to ESG is especially hollow when the private-market firms positioned to benefit have promoted ESG themselves.

KKR says it became a signatory to the UN-supported Principles for Responsible Investment in 2009. Blackstone identifies its signatory status beginning in July 2021. Signing the PRI expresses a commitment to incorporating ESG into investment practices. It is not independent certification that every fund is transparent, inexpensive or prudently managed.

In my earlier Allison Ball article, I examined KKR’s reported former sponsorship of the State Financial Officers Foundation alongside its ESG commitments and Kentucky pension business. The governance question is who finances the political infrastructure surrounding investment decisions—and what the public can see about those relationships.

A firm can market sustainability to one audience while maintaining relationships with an anti-ESG political network. That does not establish an illegal payment or purchased decision. It does expose how little an ESG label tells us about actual accountability.

Wall Street can sell to both camps. Participants pay either way.

ESG does not require expensive investments

There are low-cost ESG-screened index mutual funds and ETFs. Vanguard’s ESG U.S. Stock ETF, for example, lists an expense ratio of 0.09%.

A fiduciary can evaluate an ESG-screened index option using familiar questions: What does it own? What does the screen exclude? How much does it cost? How does it change diversification, sector exposure and expected risk?

Some screened portfolios may differ only modestly from an unscreened alternative. Others may differ substantially. Nobody should declare their returns “indistinguishable” simply because both are index funds. The comparison must be demonstrated.

But the existence of low-cost screened products destroys the argument that considering ESG requires paying private-equity fees or accepting an opaque insurance contract.

If two options genuinely serve participants’ financial interests equally, an ESG preference can help decide between them. A higher-fee manager should have to substantiate its financial case rather than sell a moral excuse for the fee.

Keep the tiebreaker from becoming a fee loophole

The regulatory history matters. The 2020 rule used an “indistinguishable” financial comparison. The Biden DOL’s 2022 rule broadened the formulation to investments that equally serve the plan’s financial interests over the appropriate time horizon, allowing collateral benefits to break a genuine tie.

It also retained the prohibition against sacrificing returns or taking additional investment risk to pursue unrelated objectives.

My position is straightforward: keep that participant-first constraint real. Do not broaden the tiebreaker further, and do not allow speculative collateral benefits to manufacture financial equivalence.

The Trump DOL’s alternative-investment proposal is a separate regulatory initiative. But its expansive treatment of other “value” raises a related danger: higher costs being justified by benefits whose value to workers is asserted rather than proved.

Neither party should permit ESG, education, diversification or lifetime-income branding to become an all-purpose excuse for higher fees, more risk and less transparency.

Governance starts with the investment contract

The G must apply to the product holding participants’ money, not merely the companies in a manager’s sustainability report.

Private-fund interests can be securities, and their advisers may be SEC registered. That does not give the fund the same regulatory structure and public disclosure obligations as an SEC-registered mutual fund. Adviser registration is not mutual-fund registration.

Private-equity and private-credit valuations often depend on models and managerial judgments rather than current market transactions. That creates a governance conflict when valuations also influence reported performance, fundraising or compensation. An audit does not turn an estimate into an executable market price.

The Global Investment Performance Standards provide a framework for performance reporting, including alternative investments. They are voluntary; verification is also voluntary. Fiduciaries should demand the actual performance report, the scope of any compliance claim and independent assurance relevant to the investment being offered. A firm-level marketing statement does not answer every fund-level question.

For a Cayman-domiciled partnership, the questions should be concrete: Which legal entity receives the money? Who holds the assets? What records can the fiduciary obtain? Which court can enforce the investor’s rights? How can the plan exit? Offshore domicile alone does not prove misconduct, but complexity must never substitute for accountability.

Fixed annuities present another governance problem. The insurer declares the credited rate under the contract and can retain an embedded spread that participants cannot readily inspect. A stable account balance does not itself disclose the economic value of the assets supporting the promise, the insurer’s credit risk or the cost of leaving.

Insurance regulation is not the same as mutual-fund regulation. Fiduciaries should demand enforceable protections, clear compensation disclosures and a credible assessment of credit and liquidity risk.

Private real estate and digital assets require scrutiny of their own valuation, custody, leverage and exit arrangements. A registered wrapper cannot erase the risks of what it holds.

An ESG attribute cannot cure a badly governed investment structure.

Indiana exposed the hypocrisy—and the cost of political shortcuts

In 2023, an Indiana fiscal analysis projected that an anti-ESG proposal could reduce pension investment returns by approximately $6.7 billion over ten years, including by restricting access to private markets and active managers.

That estimate was a forecast, not a realized liquidation loss. It does not prove that private partnerships would universally sell for 70 cents on the dollar.

But it exposed a contradiction: sweeping anti-ESG policies can collide with pension investments in firms that have embraced ESG commitments. Politicians cannot coherently condemn an entire investment philosophy while quietly exempting favored high-fee managers.

Nor should Democrats treat those managers’ ESG pledges as evidence of good governance. As I argued in my CalPERS ESG critique, sustainability branding cannot excuse inadequate scrutiny of the investment manager and its contracts.

For illiquid assets, fiduciaries should disclose credible exit-price evidence before anyone orders a political divestment—or claims that maintaining the investment is costless.

Put the G back into fiduciary responsibility

Congress and the DOL should require disclosure of every layer of compensation, valuation methods, relevant performance standards, independent assurance, liquidity restrictions, affiliated transactions and material political or lobbying relationships.

For target-date and other multiasset funds, those disclosures must reach the underlying investments. A reassuring label on the outer fund is insufficient.

Fiduciaries should document why an expensive or opaque structure serves participants better than a transparent, lower-cost alternative. Claimed education benefits should identify actual services, costs, conflicts and limits on product solicitation.

Republicans should stop attacking ESG while promoting high-fee firms that practice it. Democrats should stop accepting ESG branding as a substitute for accountability.

The Trump DOL should stop treating expanded product access and reduced litigation exposure as substitutes for stronger participant protection.

I am pro-ESG when it means examining material risks and holding managers accountable. I oppose using it to excuse expensive, conflicted investments.

The G stands for governance. Open the books. Verify the claims. Protect the participants.

Sources and related Commonsense articles

• Trump executive order on alternative investments
• DOL rescission of the 2021 supplemental statement
• DOL March 2026 proposed investment-selection rule
• DOL 2022 ESG final rule
• KKR on its PRI commitment
• Blackstone on sustainability and PRI
• Vanguard ESG U.S. Stock ETF
• SEC overview of private funds
• CFA Institute GIPS standards
• Federal Reserve review of SVB
• SVB governance-rating analysis
• Indiana projected anti-ESG costs
• Allison Ball’s ESG Shell Game
• CalPERS ESG Failure
• Trump’s 401(k) Woke Shell Game

By Chris Tobe, CFA, CAIA | The CommonSense 401k Project

There is a dangerous way to make a target-date fund look safer without making workers’ retirement savings safer.

Keep publicly traded stocks and bonds marked to market. Add private equity and private credit valued through infrequent appraisals and discretionary models. Perhaps add insurance contracts whose reported values follow contractual accounting.

Then feed those incompatible return histories into a standard-deviation and correlation model.

The assets with the slowest recognition of changing economic conditions can emerge as the portfolio’s supposed stabilizers.

The spreadsheet can reward the delay in recognizing risk—and justify putting more retirement money into the investments creating that delay.

That is the risk game.

As I argued in “The Diversification Lie,” a smooth reported return is not proof of economic stability. When those returns drive target-date selection, the accounting distortion becomes a fiduciary problem.

Standard deviation measures the numbers supplied to it

Standard deviation measures variation in a return series. It cannot determine whether those returns accurately and promptly reflect changing asset values.

A publicly traded security records market movements as they occur. A private investment may incorporate the same economic deterioration through several subsequent valuation updates.

Spread recognition of a loss over several periods, and measured volatility can fall. The underlying business has not necessarily become safer. Its debt has not disappeared. Its refinancing needs have not diminished.

The IMF has identified stale and potentially subjective valuations, fragile borrowers, and multiple layers of leverage as vulnerabilities in private credit. These are substantive risks that a smooth historical return series may fail to reveal.

Correlation can reward the same accounting delay

Suppose public stocks fall sharply this quarter while private-company valuations adjust next quarter.

A same-quarter correlation calculation can suggest that the two investments move independently. Yet both may be responding to the same economic shock, recorded on different schedules.

That creates an apparent diversification benefit from delayed measurement.

Different businesses can provide real diversification. But fiduciaries must distinguish diversification of economic exposure from differences in when losses enter the books.

A different accounting clock is not a different economic risk.

The allocation model can turn the distortion into a recommendation

In a conventional mean-variance model, an investment offering an attractive assumed return, low volatility, and low correlation can receive a larger allocation.

If those favorable inputs reflect valuation smoothing, the model can allocate more money because the risk was measured poorly.

The same problem can affect consultant scorecards even when no optimizer determines the portfolio. A target-date series may receive a favorable ranking for lower historical volatility, smaller reported drawdowns, or an attractive risk-adjusted return.

Consider two hypothetical funds with similar economic exposures. One recognizes changing values promptly. The other recognizes some changes gradually. A scorecard may penalize the first for volatility and praise the second for stability.

The manager recognizing losses promptly can look worse than the manager recognizing them slowly.

Not every target-date manager uses unadjusted historical data. Some use forward-looking assumptions, public-market proxies, or adjustments for valuation lag. The question is whether those corrections were made, whether they were credible, and whether the committee examined them.

A glossy “lower-risk” chart supplies none of those answers.

A daily price does not establish daily price discovery

A target-date fund can publish a daily net asset value while incorporating underlying private-asset valuations that remain substantially unchanged between periodic updates.

Daily calculation of the outer fund’s price does not establish daily revaluation of everything inside it.

The move from a mutual fund to a CIT does not automatically create this problem. A CIT holding the same publicly priced securities may have substantially similar investment risk.

The concern is what the new structure permits the manager to put inside—and what participants and fiduciaries can discover about it.

If a target-date fund combines market prices, private valuations, and contractual values, its risk analysis must explain how those differences were handled. Simply blending the return series can manufacture an appearance of comparability that the underlying measurements do not support.

Why this becomes a fiduciary issue

ERISA requires fiduciaries to act prudently and loyally and to diversify investments to minimize the risk of large losses, unless the circumstances make diversification clearly imprudent. Those duties concern participants’ actual economic interests.

DOL’s target-date guidance tells fiduciaries to investigate the fund’s strategies and the risks of its underlying investments. Selecting a retirement-year label and accepting the provider’s risk chart does not satisfy that investigation.

A serious fiduciary concern arises when a committee:

• Selects a target-date series because of supposedly lower volatility without investigating valuation lag.
• Accepts diversification claims based on correlations calculated from mismatched valuation schedules.
• Treats smooth returns as a substitute for examining leverage, liquidity, and credit exposure.
• Pays higher fees for a claimed risk reduction that depends materially on untested accounting assumptions.
• Continues relying on the same presentation after receiving evidence that its inputs are unreliable.

These are failures of investigation and judgment that can exist before a market collapse exposes the portfolio.

A subsequent loss does not automatically establish a breach. But fiduciaries should not need a collapse to discover that their selection process compared unlike measurements as though they were equivalent.

Consultants cannot turn questionable inputs into prudent advice by adding a logo

Consultants are hired because committees need expertise. That makes the treatment of valuation smoothing central to the service being purchased.

What data did the consultant use? Were private-asset returns adjusted? Were public-market proxies considered? Did the consultant test whether the recommended allocation survived higher volatility and correlation assumptions?

Did the consultant explain the difference between reported volatility and economic risk?

Where a consultant acts as an ERISA fiduciary, its advice is subject to fiduciary obligations. Its precise legal status depends on its role and the applicable law. A plan committee also retains responsibilities for prudent selection and monitoring of its advisers; hiring expertise does not make those responsibilities disappear.

A particularly troubling situation arises when a consultant understands the smoothing problem but presents the resulting low-risk numbers without a meaningful explanation. Compensation or commercial relationships favoring the recommended products would demand additional scrutiny.

An expert’s presentation should expose the measurement problem. It should not give the problem professional cover.

Congress should make the risk game visible

Litigation alone is an inadequate disclosure system. Workers should not have to suffer losses, locate counsel, and fight through discovery to learn how their default retirement investment was classified as safe.

Congress should require a standardized Form 5500 attachment for target-date and other multiasset funds, covering material underlying investments regardless of their legal structure.

The attachment should disclose:

• How assets are valued and how often underlying valuations substantively change.
• The volatility and correlation assumptions actually used to justify allocations.
• Whether and how those assumptions address smoothing and valuation lag.
• How estimated risk and recommended allocations change under prescribed alternative assumptions.
• Material leverage, withdrawal restrictions, and unfunded commitments.
• Information the manager refused or failed to provide.

The decisive disclosure is a side-by-side test: Does the “safer” portfolio still look safer when the accounting assumptions change?

The law should require consistent sensitivity methods while identifying adjusted results as estimates. It should also require investment providers to supply the information and committees to document their review.

“Proprietary” should not be an excuse for concealing the material assumptions used to allocate workers’ retirement savings.

Workers deserve economic risk analysis

Standard deviation and correlation are useful tools when the data and assumptions suit the question. They become misleading when treated as complete measures of risk across assets whose values are recognized on fundamentally different schedules.

A portfolio can become more leveraged, less liquid, and more expensive while its reported volatility falls.

Calling that portfolio safer without investigating the measurement distortion is a claim fiduciaries should have to substantiate.

Retirement money should be allocated according to economic risk—not according to which manager has the smoothest accounting.

• https://commonsense401kproject.com/2026/05/04/the-diversification-lie-how-private-equity-and-private-credit-use-corrupt-accounting-to-hijack-pension-and-401k-allocations/
• https://commonsense401kproject.com/2026/10/11/401k-who-is-your-regulator-dol-sec-iowa-nevada-or-the-caymans/
• https://commonsense401kproject.com/2026/10/02/the-401k-ips-illusion-when-weak-policies-protect-fiduciaries-and-the-industry-more-than-participants/
• https://commonsense401kproject.com/2026/09/07/principal-is-building-an-illiquidity-layer-cake-for-your-401k/
• https://commonsense401kproject.com/2026/08/31/liquidity-is-a-retirement-risk-erisa-fiduciaries-need-to-start-taking-seriously/

How Private Equity Will Sneak Into Your Retirement Account

Private equity wants access to your 401(k). The easiest route is to bury its contracts inside an investment with a reassuring name: a target-date fund.

Private equity contracts can impose fees and expenses 20 times those of low-cost 401(k) investments. A 2% annual management fee alone is 20 times a 0.10% fund expense ratio—before carried interest and additional expenses. Managers also exercise enormous discretion over valuations used to calculate their reported performance.

My position is straightforward: no competent, honest, transparent regulatory system should permit retirement investments to hide their full costs or let managers mark their own performance scorecards without rigorous, independent scrutiny.

The industry wants access to workers’ retirement savings without accepting the transparency and accountability associated with SEC-registered mutual funds. Collective investment trusts, or CITs, provide a route around that mutual-fund framework.

Your retirement account can remain subject to ERISA while the investments inside it move through a maze of different regulatory systems.

The Department of Labor oversees ERISA fiduciary obligations. The SEC regulates registered mutual funds. State and Federal Banking regulators supervise CIT trustees. State insurance departments regulate annuity issuers. Private funds add another layer of legal entities, contracts, exemptions, and sometimes offshore domiciles.

Each layer gives the industry another opportunity to obscure who holds the money, who sets the fees, who values the assets, and who is responsible when something goes wrong.

The Target-Date Doorway

Target-date funds are a powerful distribution channel because employers frequently select them as the plan’s default investment, known as a qualified default investment alternative, or QDIA. Workers can end up in these products without making an affirmative investment selection.

Historically, a target-date portfolio generally combined stock and bond funds, changing their proportions as the retirement date approached. The industry’s ambition is to add private equity, private credit, annuities, and other lucrative contracts to that mix.

The investment wrapper is already changing.  Mutual funds were  71%  of target date funds in 2015.  By the end of 2025, CITs held 54% of target-date assets, leaving mutual funds with approximately 46%. CITs have become the majority vehicle in the target-date market.

CITs are exempt from the registration framework that applies to mutual funds.  Most CIT trustees are state-chartered trustees with weak oversight and controls.

Follow the Money laundered by layers of  Weak Regulators

Consider a plan offering five target-date funds: 2030, 2040, 2050, 2060, and 2070. Each uses a different allocation among six underlying investments.

The outer target-date vehicle is a CIT administered by a Nevada-chartered trust company. Inside it, the money travels through additional layers:

Underlying investment	Intermediate vehicle	Contract or investment inside it
Large-cap equity	Oregon-chartered trustee’s CIT	S&P 500 index exposure through a separate-account annuity issued by an Iowa-domiciled insurer
Small-cap equity	Pennsylvania-chartered trustee’s CIT	Small-cap index exposure through a separate-account annuity issued by a Connecticut-domiciled insurer
International equity	Oregon-chartered trustee’s CIT	International index exposure through a separate-account annuity issued by a Kansas-domiciled insurer
Fixed income	Oregon-chartered trustee’s CIT	General-account fixed annuity issued by an Iowa-domiciled insurer
Private credit	Nevada-chartered trustee’s CIT	Interest in a Delaware-domiciled private credit fund
Private equity	Nevada-chartered trustee’s CIT	Interest in a Cayman Islands-domiciled private equity fund

This is an illustrative composite based on structures I have encountered or seen in development. It is not a claim that one identified plan currently holds this exact combination.

The insurer’s domiciliary state identifies its primary insurance regulator. A private fund’s Delaware or Cayman domicile identifies where the entity is organized; it does not, by itself, establish who regulates its investment manager or what investor protections apply.

That is precisely why Congress must require both domicile and actual regulatory jurisdiction to be disclosed.

A worker may think “large-cap equity” means ownership of a conventional stock fund. In this example, the worker’s exposure runs through a CIT and an insurance contract. The words “private equity” reveal even less about the underlying partnership agreement, valuation practices, fee arrangements, leverage, and withdrawal restrictions.

A single target-date label can conceal a chain of contracts spanning several states and an offshore jurisdiction.

Disclosure Must Reach the Underlying Contracts

Existing disclosures do not give participants a uniform, comprehensive map through every layer of a multi-asset retirement investment.

Workers need to know more than the outer fund’s name, allocation, and reported expense ratio. They need to know:

• What legal entities and contracts actually hold their retirement money.
• Which regulator supervises each trustee, insurer, fund, and investment manager—and which activities that supervision covers.
• Every layer of fees, expenses, carried interest, insurance spreads, and payments to affiliates or service providers.
• Who values the investments, how performance is calculated, and whether reported returns receive independent verification.
• What happens when participants want their money back, an insurer is downgraded, or a private fund suspends withdrawals.

A regulator overseeing the trustee is not necessarily examining every underlying contract for the protections workers assume they have.

Congress should prohibit the use of regulatory layering to conceal information that would have to be disclosed if the plan held the underlying investment directly.

Congress Must Act Regardless of Intel

The Supreme Court’s Anderson v. Intel case concerns whether an investment-underperformance claim must identify a “meaningful benchmark” to survive the pleading stage. That decision could affect whether participants reach discovery and obtain evidence about complicated investment arrangements. It does not directly decide a comprehensive statutory right to underlying-investment disclosure.

Large plans can use master trusts and custom portfolios to create similar layers of complexity. Congress must cover those structures alongside CITs and mutual funds.

Workers should not have to file a lawsuit, defeat a motion to dismiss, and spend years pursuing discovery to learn where their retirement money went.

Transparency must be a statutory obligation that applies before the money is invested.

Congress should require a standardized Underlying Investment and Regulatory Disclosure Schedule attached to Form 5500 and available to participants without charge. It should cover every target-date fund, CIT, master trust, separate account, and other pooled or multi-asset arrangement used by an ERISA plan.

The schedule should require:

1. Complete identification of every underlying fund and investment contract, through every intermediate layer, including its legal name, structure, domicile, and share of plan assets.
2. Identification of every responsible regulator, the entity and activity it supervises, and applicable registration exemptions. “SEC-registered adviser” must never substitute for disclosure that the fund itself is unregistered.
3. Full disclosure of costs at every level, in dollars and percentages, including management fees, carried interest, fund expenses, underlying portfolio-company charges, insurance spreads, commissions, and affiliate payments.
4. Standardized performance and valuation disclosures, including gross and net returns, valuation methods, independent verification, and whether a fund claims compliance with recognized performance-reporting standards.
5. Complete liquidity and credit-risk disclosures, including lockups, gates, surrender charges, market-value adjustments, capital commitments, downgrade provisions, and rights following issuer default.
6. Public access to governing investment contracts and material amendments, with no confidentiality clause permitted to override the disclosure obligation.

Trade-secret claims should never conceal fees, valuation methods, withdrawal restrictions, or regulatory jurisdiction from the workers whose savings finance these investments.

The legislative principle is simple: if an investment receives tax-favored retirement money, its managers must disclose what they are selling, what they are charging, how they calculate performance, and who regulates them.

A retirement date on the label is no excuse for secrecy underneath.

Before private equity gets another dollar of workers’ default retirement savings, Congress should require the industry to open the books.

Intel’s 401(k) Case: Will the Supreme Court Choose Transparency and Accountability—or Enrich the Private Equity Industry?

Fake Comments used to force Private Equity into your 401(k)

Comparing Target-Date Funds by Vintage Year Is Ripe for Abuse

THE CONTRACTS PRIVATE EQUITY DOESN’T WANT 401(k) PARTICIPANTS TO SEE

By Christopher B. Tobe | The CommonSense 401k Project

Some accountability has survived in the AT&T pension risk transfer litigation.

On September 28, 2026, Judge Nathaniel Gorton dismissed the claims against AT&T while allowing a prudence claim against State Street to proceed. The litigation concerns AT&T’s $8.05 billion transfer of pension obligations to Athene in 2023. State Street had been given responsibility for selecting the annuity provider. This is a chance to examine that selection—. [1]

For retirees concerned about being moved into an insurer’s fixed annuity, that opening matters. The question is whether the fiduciary adequately protected the people whose lifetime income would depend on the selected insurer.

Hiring a Consultant Is Not the Same as Delegating the Decision

The dismissal of AT&T raises an understandable question: In 401(k) litigation, hiring a consultant generally does not eliminate the plan committee’s responsibility. Why did AT&T get out here?

The distinction is decision-making authority.

When a consultant recommends investments and a committee makes the decisions, the committee remains responsible for those decisions. A valid delegation of discretionary authority can change who is responsible for the delegated function. That principle can apply in a 401(k) plan as well as a pension risk transfer.

ERISA nevertheless preserves responsibility for a fiduciary’s own conduct in establishing and continuing a delegation, and for specified forms of participation in another fiduciary’s breach. Delegation is not blanket immunity. [3]

Here, the court found insufficient allegations that AT&T influenced the selection, ignored warning signs, failed to monitor State Street, or knew of a breach. That is a conclusion about the allegations in this case—not a rule that employers can escape all fiduciary responsibility by hiring an outside firm. [1,2]

My concern is practical: How much can retirees know about the sponsor’s role before they obtain the internal documents? The appointment agreement, instructions, communications and oversight records may reveal far more than a public announcement saying an “independent fiduciary” selected the insurer.

A Pension Promise Has Value Before a Check Is Missed

The surviving claim also carries an important recognition: A pension annuity can allegedly be less valuable because it is riskier, even while payments continue.

The court maintained its standing determination and allowed State Street’s prudence claim to advance. It left disputes over insurer comparisons and the protection afforded by Athene’s separate account for later factual examination. Only Count IV survives; the other claims were dismissed. [2]

That approach is more sensible than requiring retirees to wait for an insurer’s failure.

In my earlier article on the Lumen litigation, I criticized the idea that retirees have suffered no injury because the Athene “time bomb” has not exploded. The economic question is the value of the replacement promise when it is received—not merely whether this month’s payment arrives. [5]

A pension risk transfer requires scrutiny of the protections surrendered and the protections received. Retirees deserve an explanation of who now owes their benefits, which assets support them, what happens under financial stress, and what recourse remains.

State Street’s Selection Deserves Examination

The Department of Labor’s annuity-selection framework calls for examining the insurer’s portfolio quality and diversification, capital, size relative to the transaction, other liabilities, contract structure and guaranty protections. It directs fiduciaries toward the safest available annuity, subject to a participant-interest qualification. [4]

Those considerations support concrete questions for discovery:

• Which insurers were realistically available, and how did their bids compare?
• What did State Street examine concerning affiliated investments, private credit, reinsurance and liquidity?
• What legal protection does the separate account actually provide?
• What happens after a serious downgrade, and are there enforceable remedies?
• What information did State Street provide to AT&T, and what oversight followed?

A separate-account label should lead to examination of enforceable contract rights. It should not end the inquiry.

My policy position remains that retirees need meaningful downgrade protections before insurer distress becomes insolvency. Whether this particular contract contains adequate protections must be established from the contract and supporting evidence.

The Epstein Files Add Questions About Candor

The Epstein disclosures deserve mention, with precise attribution.

The Financial Times reported that Jeffrey Epstein proposed an Athene-related tax plan he claimed could save Apollo’s co-founders as much as $300 million, seeking a 25 percent success fee.. [6]

In February 2026, the AFT and AAUP asked the SEC to investigate whether Apollo’s disclosures accurately described its executives’ dealings with Epstein. Their letter cited released documents concerning Athene and tax matters. These are concerns raised in a request for investigation, not findings of wrongdoing. [7]

These later disclosures cannot automatically establish what State Street should have known in 2023. They do, however, reinforce the need to examine the reliability of representations, governance and due diligence involving the Apollo-Athene organization.

Some Accountability Is Better Than a Closed Courthouse Door

AT&T’s dismissal is disappointing. But State Street must still defend the prudence of its insurer selection.

The surviving claim offers an opportunity to examine whether retirees received the protection a prudent fiduciary should have obtained. Discovery should establish the available alternatives, the risks examined, the contractual safeguards and the actual decision process.

Retirees should not have to experience an insurer failure before the fiduciary’s work can be scrutinized.

Sources

[1] PLANSPONSOR, September 30, 2026: https://www.plansponsor.com/judge-allows-prt-claims-against-state-street-dismisses-counts-against-att/

[2] Your ERISA Watch, September 30, 2026, summary of Piercy v. AT&T Inc., No. 24-10608-NMG, 2026 WL 2905359 (D. Mass. Sept. 28, 2026): https://www.yourerisawatch.com/2026/09/your-erisa-watch-week-of-september-30-2026/

[3] ERISA §405, 29 U.S.C. §1105: https://www.law.cornell.edu/uscode/text/29/1105

[4] DOL report to Congress on Interpretive Bulletin 95-1: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/secure-2.0/report-to-congress-on-interpretive-bulletin-95-1.pdf

[5] Prior CommonSense articles:

Judge Says Lumina Retirees Have No Injury—Because the Athene Time Bomb Hasn’t Exploded Yet

Apollo’s garbage dump – Athene loading up on risk endangers retirees in PRT’s and other annuity investors

[6] Financial Times, “Apollo chief Marc Rowan consulted Epstein on firm’s tax affairs”: https://www.ft.com/content/092d9e44-ec17-4da7-8b58-e43bf09113ab

[7] AFT/AAUP letter to the SEC, February 17, 2026: https://www.aft.org/sites/default/files/media/documents/2026/Letter_to_SEC_re_Apollo_Global_Management_February_17_2026.pdf

By Christopher B. Tobe — The CommonSense 401k Project

On Tuesday, October 6, the Supreme Court will hear oral argument in Anderson v. Intel Corporation Investment Policy Committee. The immediate question concerns what workers must allege before a lawsuit challenging imprudent retirement investments can proceed. The practical stakes reach much further: can fiduciaries place workers’ savings in complicated private investment structures, then use those structures’ uniqueness to make accountability harder?

Tuesday is the argument, not the decision. But the choice taking shape deserves public attention. Supreme Court docket

Private equity’s representatives understand the stakes. The American Investment Council and Managed Funds Association filed a brief supporting Intel. They argue that affirming the meaningful-benchmark standard would reduce litigation risk and encourage alternative investments in 401(k)s. They portray litigation as an obstacle to workers receiving better returns and diversification. I see a different danger: making accountability harder can make expensive products easier to sell. Industry brief

The retirement industry’s sales opportunity is clear. The participant’s benefit still needs to be demonstrated.

The Court already explained who bears the loss

In Thole v. U.S. Bank in 2020, the Court’s majority denied standing to DB pensioners whose fixed benefits had been paid and would remain the same regardless of the lawsuit’s outcome. Justice Kavanaugh expressly contrasted those benefits with 401(k) accounts, whose value depends on investment decisions.

Your employer generally bears the funding obligation for a traditional DB pension. In a DC plan, investment losses and excessive investment costs reduce the account supporting your retirement.

Justice Sotomayor’s dissent, joined by Justices Ginsburg, Breyer and Kagan, argued that beneficiaries had an enforceable interest in their retirement trust’s financial integrity. She warned against preventing pensioners from challenging mismanagement until pensions approached default. The dissent emphasized trust protections, fiduciary duties and participants’ ability to enforce them. Majority and dissent

Thole did not grant automatic standing for every DC claim, and it was not a ruling specifically about private equity losses. But its economic distinction matters: a worker whose own account suffers investment harm presents a different situation from a pensioner whose fixed payment is unaffected.

Intel shows how the pension structure reaches the 401(k)

Intel’s filings provide a concrete example. Its 2015 401(k) report described a master trust containing assets of the 401(k), Retirement Contribution Plan and Minimum Pension Plan. Automatically enrolled participants’ deferrals went into target-date funds investing in master trust accounts. The underlying investments included hedge funds and private equity, venture capital, private credit and other private assets. Some closed-end holdings could not be redeemed on a presently determinable date. Intel’s 2015 filing

The structure later changed. Intel’s 2019 report states that investments moved into units of proprietary collective investment trust funds in January 2018. The master trust was dissolved in January 2019, with the 401(k)’s interests transferred to a separate trust. The report identified all three plans as participating in the CIT trust. Intel’s 2019 filing

That history matters. A participant can hold an interest in a target-date fund, which holds pooled investment interests, which ultimately expose the worker to private funds and their contractual terms.

These filings disclose the structures; they do not prove intentional concealment. My concern is that reporting an investment as units in a pooled vehicle can leave the underlying economics several layers away from the worker trying to understand them.

Pooling DB and DC investments does not pool the employer’s promise to pay a fixed pension. The 401(k) participant still bears the account’s investment results.

A benchmark can help—or protect the decision being challenged

Intel defended its strategy as a way to reduce volatility and downside risk. The Ninth Circuit found the plaintiffs’ comparisons inadequate because the proposed comparator funds had different objectives and risks. Judge Berzon’s concurrence nevertheless stressed that an empirical comparator is not universally required to plead imprudence. Ninth Circuit opinion

Fair comparisons matter. A stock-heavy fund’s higher return during a bull market does not, by itself, establish that a more conservative portfolio was imprudent.

But a benchmark built around the challenged allocation answers a limited question: how did the selected allocation perform against a representation of itself? It does not necessarily answer whether choosing that allocation was prudent for participants in the first place.

If the complaint challenges substantial private equity exposure, requiring a comparator with substantially the same exposure risks assuming the wisdom of the decision under challenge.

A custom strategy should face meaningful evaluation of its total costs, liquidity, valuation practices, conflicts and expected benefits. Its uniqueness should not become a shield.

Workers need a fair path to the evidence

Committee records, manager agreements, fee arrangements and the analysis supporting a private investment allocation can be essential to evaluating prudence. Workers ordinarily have far less access to those materials than fiduciaries and their advisers.

A pleading rule should require facts supporting a plausible claim. It should also recognize where the evidence resides. Demanding a near duplicate investment before discovery can make the most complicated arrangements the hardest to challenge.

My earlier CommonSense articles warned about secrecy and benchmarks and corporate relationships that can compete with participants’ interests. Intel brings those concerns to the courthouse door.

The Court should preserve a realistic path for workers to challenge plausibly imprudent decisions and obtain the evidence needed to evaluate them. That would not predetermine Intel’s liability. It would preserve accountability.

Private equity managers want access to workers’ retirement savings. Workers deserve access to an effective process for protecting those savings.

The Supreme Court already recognized in Thole that 401(k) participants bear the investment consequences. It should ensure that they also have a fair opportunity to enforce the fiduciary protections that accompany them.

Intel Update: A “Meaningful Benchmark” Must Not Become a Shield for 600-Basis-Point Fees

By Christopher B. Tobe | The CommonSense 401k Project | October 6, 2026

Tuesday’s Supreme Court argument in Anderson v. Intel Corporation Investment Policy Committee sharpened the concern raised in my October 5 article: can a retirement investment become so customized that its design protects it from meaningful accountability?

Bloomberg Law reports that the justices appeared receptive to requiring meaningful comparisons for claims based on investment underperformance, while debating how precisely to define that requirement. Justice Amy Coney Barrett raised the danger that language requiring similar aims and strategies could lead lower courts to demand an investment “twin.” These are signals from oral argument, not a ruling. [1]

That distinction could determine whether workers obtain the evidence needed to examine expensive investments inside their 401(k)s.

My concern about target-date funds is that their varying allocations create a convenient barrier to comparison. Different retirement dates, glide paths, stock-bond mixes and alternative investments allow providers to argue that almost any competing fund is insufficiently similar.

I believe the industry has incentives to design and promote structures that make transparency and accountability harder. I believe that blocking transparency to protect fees was the original purpose of target-date funds. The immediate problem is their potential use today: each additional layer of customization can become another reason to reject a participant’s comparison.

Workers should not have to find a duplicate of a disputed investment decision before they can question that decision.

Fees provide a particularly revealing example. Morningstar’s research identifies expense ratios as a strong predictor of future fund success. In its 2016 study, the cheapest U.S. equity funds had a 62% success rate, compared with 20% for the most expensive group; success meant surviving and outperforming their category. That evidence concerns the funds studied, rather than every private equity investment, but it reinforces why costs deserve serious scrutiny. [2]

Future gross returns are uncertain. Fees reduce what participants keep.

Consider a simplified hypothetical allocation within a target-date fund—not an assertion about Intel’s actual holdings or charges:

Component	Allocation	Annual component cost	Contribution to portfolio cost
Large-cap equity index fund	90%	10 basis points (0.10%)	9 basis points
Private equity	10%	600 basis points (6.00%)	60 basis points
Total	100%	—	69 basis points (0.69%)

The 10% private equity sleeve produces approximately 87% of the combined investment cost. On $100 million, these assumed costs equal $690,000 annually: $90,000 for the index allocation and $600,000 for private equity.

An allocation entirely to the 10-basis-point index fund would cost $100,000 annually. The difference is $590,000. That comparison isolates the cost burden; it does not establish that the two portfolios have identical risks or that the all-index portfolio is the appropriate retirement allocation.

The private equity sleeve would need to earn 5.9 percentage points more annually before fees than the index sleeve simply to offset its additional assumed cost, holding the other 90% unchanged. Whether it can justify that hurdle, its risks and its liquidity restrictions deserves examination.

The assumed 600 basis points represent the sleeve’s annual economic cost for this illustration. Actual private equity costs must be examined from the agreements and accounts: management fees, carried interest, fund expenses, offsets and additional layers of charges. A headline expense ratio may not answer every economic-cost question, and overlapping charges must not be counted twice.

Now consider how a rigid benchmark rule could frustrate that examination.

Participants identify a lower-cost target-date alternative. The defense responds that it lacks the same private equity allocation. Participants identify a low-cost public equity alternative for the expensive sleeve. The defense responds that public equity follows a different strategy.

If those differences end the case before discovery, the expensive allocation becomes part of its own protection. Workers are effectively told to accept the disputed design before they can challenge its economics.

A benchmark matching the private equity allocation may help evaluate implementation. It cannot, by itself, establish that choosing the allocation was prudent. Nor does a different overall allocation make component fees impossible to examine.

The Supreme Court should preserve that distinction. Comparing realized performance requires attention to risk, objectives and investment exposure. A plausible challenge to excessive costs, conflicts or the process used to approve an allocation presents additional questions. Plaintiffs still need supporting facts, but a search for an identical portfolio should not automatically displace those questions.

Discovery can establish what fiduciaries actually reviewed: the complete compensation arrangements, expected net benefits, available alternatives, liquidity terms and reasons for selecting expensive private investments. Those records can support or undermine a claim. A customized portfolio should remain open to that examination.

My October 5 article warned that uniqueness could become a shield. Tuesday’s argument makes the danger more concrete.

The Court should ensure that “meaningful benchmark” means a useful tool for evaluating a claim. If it becomes a requirement to reproduce the very allocation being challenged, it can protect high fees and discourage scrutiny.

Workers deserve to know what each investment costs, why it was selected and what evidence justified paying more. A target-date label should not make those questions harder to ask.

Sources

[1] Bloomberg Law, Jacklyn Wille, “Justices Debate How Much 401(k) Benchmark Guidance to Give,” October 6, 2026.

https://news.bloomberglaw.com/employee-benefits/justices-debate-how-much-guidance-to-give-on-401k-benchmarks

[2] Morningstar, “Study by Morningstar’s Russel Kinnel Shows Fund Fees are Proven Predictors of Future Success,” May 5, 2016.

https://newsroom.morningstar.com/news/news-details/2016/Study-by-Morningstars-Russel-Kinnel-Shows-Fund-Fees-are-Proven-Predictors-of-Future-Success/default.aspx

Prior article:

Intel’s 401(k) Case: Will the Supreme Court Choose Transparency and Accountability—or Enrich the Private Equity Industry?

In May, I published a detailed history of what I called CalPERS’ “sick, twisted relationship” with Jeffrey Epstein linked Apollo. The piece documented decades of investments, placement-agent payments, conflicts, criminal conduct by former CalPERS officials, and the remarkable fact that Apollo continued to receive CalPERS business long after the scandal exploded.  https://commonsense401kproject.com/2026/05/22/calpers-sick-twisted-relationship-with-jeffrey-epstein-linked-apollo-private-equity/

William D. Cohan’s new 688-page book, Money to Burn: The Unvarnished Truth About Leon Black, Apollo, and the Rise of a New Wall Street, now provides an important independent confirmation of many of those facts. See pages 319-321

And in some respects, Cohan’s telling makes the old CalPERS public-relations narrative look even weaker.

My original article documented a relationship in which CalPERS committed billions to Apollo, bought an ownership stake in Apollo itself, and saw former CalPERS board member Alfred Villalobos receive more than $35 million in Apollo-related commissions across multiple transactions. The article also detailed former CalPERS CEO Federico Buenrostro’s criminal conduct, Villalobos’s role as Apollo’s placement agent, Leon Shahinian’s private-jet trip to New York, and Apollo’s continued relationship with CalPERS afterward. The CommonSense 401k Project

Cohan independently walks through much of this history on pages 319–321 of his book.

Cohan confirms the scale of Apollo’s dependence on CalPERS

Cohan describes CalPERS at the time as both a strategic investor in Apollo’s management company and an approximately $5 billion investor in Apollo funds.

That matters because the placement-agent scandal is sometimes treated as though Apollo were merely one investment manager among hundreds that happened to get caught near a corrupt intermediary.

That framing misses the scale of the relationship.

CalPERS was an extraordinarily important Apollo client.

My earlier investigation identified at least $6.55 billion of documented CalPERS commitments to Apollo vehicles and transactions over time, including commitments after the scandal. The CommonSense 401k Project

Cohan therefore reinforces the core point: this was not some trivial side relationship.

Cohan confirms the extraordinary Villalobos payments

Cohan recounts the investigation into former CalPERS trustee Alfred Villalobos and former CalPERS CEO Federico Buenrostro.

He notes that Villalobos and his firm received more than $60 million in placement-related compensation involving CalPERS business generally.

More specifically, the SEC later alleged that Buenrostro and Villalobos fabricated disclosure documents that induced Apollo to pay placement-agent fees it otherwise would not have paid. The SEC described a $20 million placement-agent fee scheme. SEC

The Justice Department later stated that Villalobos’s ARVCO acted as Apollo’s placement agent in securing approximately $3 billion of CalPERS investments in Apollo-managed funds. DOJ said Apollo ultimately paid ARVCO approximately $14 million after receiving fraudulent disclosure letters. Department of Justice

Those numbers differ because the government proceedings addressed somewhat different transactions and theories. What does not change is the core fact:

Apollo paid Villalobos millions of dollars to help obtain CalPERS money.

The Shahinian episode may be the ugliest part

Cohan devotes substantial attention to Leon Shahinian, the senior CalPERS investment officer responsible for billions of dollars of private-equity investments.

According to Cohan, Shahinian already knew Leon Black and had a good relationship with him.

Cohan makes the obvious point:

“No intermediary was necessary.”

Yet Apollo nevertheless hired Villalobos in connection with the CalPERS transaction.

Villalobos then invited Shahinian to New York for a black-tie Museum of Modern Art event honoring Leon and Debra Black.

Shahinian traveled with Villalobos by private jet.

Villalobos paid the expenses and then billed Apollo approximately:

• $50,000 for the private jet,
• $8,000 for hotel expenses, and
• $1,500 for car services.

Apollo reimbursed those expenses.

About a month later, Shahinian recommended that CalPERS proceed with the Apollo investment.

Cohan says Shahinian did not tell the CalPERS Investment Committee about the New York trip.

This substantially reconfirms the account in my May article. The CommonSense 401k Project

And it raises the same question today that it should have raised then:

Why was a placement agent being paid millions when Apollo already had direct access to the CalPERS official evaluating its investment?

The supposed $125 million “concession” needs to be put in perspective

One element of Cohan’s account deserves more skepticism.

In April 2010, Apollo agreed to reduce fees charged to CalPERS by $125 million over five years and agreed not to use placement agents for future CalPERS commitments. Apollo disclosed the arrangement publicly in its SEC filings. SEC

Contemporary press coverage presented this as a significant concession. CalPERS eventually announced roughly $215 million in fee reductions across multiple managers, with Apollo accounting for $125 million of the total. Los Angeles Times

I don’t view the $125 million in the same way.

Apollo had already made enormous amounts of money from CalPERS before 2010 and would continue making enormous amounts afterward.

CalPERS did not terminate Apollo.

It did not blacklist Apollo.

It did not liquidate every Apollo relationship.

It did not permanently prohibit new Apollo commitments.

Instead, it negotiated a five-year fee reduction while preserving one of CalPERS’ largest private-equity relationships.

That looks much less like punishment when viewed against the economic value of keeping CalPERS as a long-term client.

A useful way to describe it is:

CalPERS recovered $125 million while preserving a relationship worth potentially billions of dollars to Apollo.

That may have been a rational settlement from Apollo’s perspective.

It was also a tremendous public-relations asset for CalPERS.

Management could point to a nine-figure number and say it had forced concessions from Wall Street.

Meanwhile, Apollo remained inside the tent.

The placement-agent promise was even less impressive

Apollo also promised not to use placement agents to obtain future CalPERS commitments.

Again, this sounds stronger in a press release than it does in historical context.

By 2010, the public-pension placement-agent model was already politically radioactive.

CalPERS itself reported in January 2010 that approximately 80% of investment managers had not used placement agents in seeking CalPERS business. Its disclosures showed that ten placement-agent firms nevertheless had received more than $125 million from managers. CalPERS

The scandals were spreading well beyond California. Public-pension placement-agent arrangements became the subject of investigations, enforcement actions, disclosure reforms, bans, and intense press scrutiny around the country.

So Apollo’s promise essentially amounted to:

We will stop using a practice that had just become enormously controversial and increasingly difficult to use anyway.

That is not much of a penalty.

It is certainly not equivalent to disgorgement of Apollo’s historical profits, a ban from managing CalPERS assets, or a fundamental reconsideration of whether Apollo should remain a trusted fiduciary counterparty.

The real winners were CalPERS and Apollo’s public-relations departments

This is the part of the episode that deserves more attention.

Apollo could say:

• it had not been charged with wrongdoing;
• it had cooperated;
• it had voluntarily reduced fees; and
• it would stop using placement agents with CalPERS.

CalPERS could say:

• it launched an investigation;
• it recovered $125 million from Apollo;
• it imposed reforms; and
• corrupt individuals were prosecuted.

Both institutions could declare the matter addressed.

The relationship survived.

That is why I do not regard the $125 million fee reduction as dispositive evidence of tough enforcement.

It may instead have functioned as a very inexpensive price for preserving an enormously lucrative institutional relationship.

Apollo had already earned substantial fees from CalPERS and other public pensions. It would earn vastly more in subsequent years.

CalPERS subsequently committed still more money to Apollo vehicles, including hundreds of millions to Apollo Investment Fund VIII, later Apollo Fund IX, Fund X and other strategies. My earlier timeline documents those subsequent commitments. The CommonSense 401k Project

The scandal therefore did not end the relationship.

It appears to have reset it.

Cohan’s book nevertheless deserves credit

This is an important point because before seeing the actual book, I worried that this history might have been omitted or minimized.

It wasn’t.

Cohan devotes several pages to it and includes details that are devastating to the sanitized version of events.

He specifically emphasizes that no intermediary appeared necessary.

He recounts Apollo reimbursing the private-jet and hotel expenses.

He recounts the millions paid to Villalobos.

He recounts the subsequent CalPERS investment recommendation.

He recounts the $125 million fee reduction.

And he notes that Apollo and the other private-equity firms “got off relatively easily” compared with Villalobos and Buenrostro.

That may be the most important judgment in these pages.

Because it is exactly what happened.

Buenrostro went to prison.

Villalobos faced decades in prison before dying prior to trial.

Apollo kept CalPERS.

The larger question remains unanswered

My May article was not simply about events from 2007–2011.

It asked why a relationship engulfed by this history was allowed to continue largely uninterrupted for another decade and a half.

CalPERS went on investing in Apollo.

Apollo became vastly larger.

Public pensions remained central to Apollo’s capital base.

And later controversies—including Leon Black’s extraordinary financial relationship with Jeffrey Epstein—again failed to cause CalPERS to meaningfully sever its Apollo relationship. The CommonSense 401k Project

Cohan’s book reinforces the historical foundation of that question.

It does not answer the question CalPERS still owes its beneficiaries and California taxpayers:

After everything CalPERS learned about this relationship, why did Apollo remain one of its favored private-market partners?

The $125 million did not answer that question.

Ending placement agents did not answer it.

Sending Buenrostro to prison did not answer it.

And fifteen years of additional Apollo business certainly does not answer it.

The scandal wasn’t merely that corruption occurred. The larger scandal may be how successfully the institutions involved survived it.

By Chris Tobe | The CommonSense 401k Project

Many workers assume that their 401(k) operates under a serious Investment Policy Statement: written rules that control fees, identify risks, expose conflicts, and hold the investment committee accountable.

That assumption is dangerously optimistic.

An IPS can impose real discipline. It can also consist of reassuring language that leaves nearly every important decision to the committee’s discretion. A document promising “prudent investments” and “periodic review” tells participants little unless it explains what must be investigated, what information must be obtained, and what happens when an investment fails the review.

My concern is that the industry has an incentive to keep these policies weak. Specific standards create a record against which decisions can be judged. Vague standards leave more room to defend almost any decision after the fact.

As I argued in my April 30 Commonsense article, weak policies are especially troubling when retirement products contain opaque fees, contractual restrictions, or underlying investments that participants cannot readily examine. The arrival or proposed expansion of private equity, insurance products, and crypto makes meaningful investment governance more urgent.

Honeywell: A disclosure right can be difficult to enforce

Bloomberg Law reported on October 1, 2026, that participants in the CAES Systems LLC 401(k) plan, associated with a company acquired by Honeywell, lost their remaining claim over failure to provide the plan’s IPS. According to the report, Judge Eumi K. Lee concluded that participants lacked standing because they failed to demonstrate injury from the alleged nondisclosure.

That is a standing ruling. It should not be presented as a blanket decision that plans need no IPS or can always withhold one.

The earlier September 19, 2025, order makes the outcome particularly revealing. Participants alleged that the plan charter required the committee to adopt an investment policy, periodically review it, and oversee compliance. The judge concluded that they plausibly alleged a disclosure obligation under ERISA because a formally adopted policy governing investment decisions could be an instrument under which the plan operated. The disclosure claim survived that motion to dismiss.

Yet the later standing ruling, as reported, prevented participants from pursuing it.

This illustrates a serious accountability problem: participants may face a demand to demonstrate concrete injury from being denied information that could help them understand how their retirement money was managed. A disclosure obligation offers limited practical protection if the people it is supposed to benefit cannot enforce it.

Goldman Sachs: No IPS does not automatically mean a breach

In Falberg v. Goldman Sachs, the district court rejected the argument that failure to adopt an IPS established imprudence. The Second Circuit affirmed in a February 14, 2024, summary order.

The appellate court emphasized that the record showed a deliberative investment process, including independent advice and detailed investment reports. It did not establish that investment committees can dispense with investigation, monitoring, or fiduciary responsibility.

Nevertheless, the practical message available to the industry is clear: a written IPS is not a universal prerequisite to defending a plan’s investment process.

Honeywell and Goldman address different legal questions, but together they expose the weakness in the public’s assumption. Workers cannot simply presume that a meaningful written policy exists, or that they will obtain an effective remedy when access is denied.

Why an empty policy can be attractive

A strong IPS forces difficult questions before a contract is signed.

Who receives compensation? What restrictions apply if the committee wants to leave? Who determines asset values? What happens if an insurer deteriorates? What evidence supports selecting this product over available alternatives?

A superficial IPS can avoid those questions by promising to consider “appropriate factors” without identifying the factors or requiring a documented answer.

I suspect that some sponsors and advisers prefer this flexibility because it reduces the number of specific commitments that participants can test. That is an assessment of the incentives, not a finding that Honeywell or Goldman deliberately weakened policies to conceal misconduct.

The distinction matters. Avoiding a specific written commitment may narrow one avenue of challenge. It does not erase ERISA’s underlying fiduciary duties.

Complex products need specific scrutiny

Private equity demands scrutiny of total fees, carried interest, valuation methods, leverage, capital commitments, and liquidity. A smooth reported return should never substitute for examining how the assets were priced and whether the plan can obtain cash when needed.

General account and separate account fixed annuities demand scrutiny of insurer credit exposure, crediting-rate discretion, embedded spreads, compensation arrangements, surrender charges, market-value adjustments, and restrictions on plan-level withdrawals. A policy that treats “principal protection” as the complete analysis leaves the contractual risks largely unanswered.

Crypto exposure demands scrutiny of volatility, custody, trading costs, valuation, and the precise exposure being purchased. A cryptocurrency holding and an investment in a crypto-related business present different questions.

These are proposed oversight standards. Neither cited case establishes that its plan held private equity, annuities, or crypto.

The same scrutiny should extend inside target-date funds and collective investment trusts. Reviewing the outer wrapper cannot substitute for understanding material underlying exposures and contractual terms.

What participants should demand

A useful IPS should require:

• A complete accounting of direct and indirect compensation, with reasonable estimates and explanations where exact amounts cannot be obtained.
• Written review of material contract terms before signing, including exit costs and liquidity under stress.
• Examination of underlying holdings, valuation methods, leverage, and credit exposure.
• Identification of conflicts, parties in interest, and applicable prohibited-transaction exemptions and their conditions.
• Clear monitoring responsibilities, review triggers, and documented reasons for retaining an investment after concerns arise.
• Participant access to the policy and meaningful explanations of material revisions.

Flexibility can be appropriate. It should come with reasons, records, and accountability.

An IPS cannot guarantee prudent decisions. But a policy that never requires the committee to confront fees, credit risk, liquidity, valuation, or conflicts offers little protection to the people financing the plan.

Workers deserve investment rules that help protect their retirement money. They should not have to mistake a sponsor’s carefully preserved discretion for fiduciary discipline.

Sources

• Prior Commonsense article: https://commonsense401kproject.com/2026/04/30/investment-policy-statements-ips-are-avoided-in-401ks-to-hide-fees-and-risks/
• Bloomberg Law, October 1, 2026: https://news.bloomberglaw.com/employee-benefits/honeywell-unit-free-from-401k-fund-policy-disclosure-lawsuit
• Phillips/Cobham, September 19, 2025 order: https://docs.justia.com/cases/federal/district-courts/california/candce/5:2023cv03785/416085/93
• Falberg district court opinion: https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1:2019cv09910/525303/256/
• Falberg appellate summary order: https://benefitslink.com/src/ctop/falberg-v-goldman-sachs-2dcir-02142024.pdf

By Christopher B. Tobe | CommonSense 401k Project | October 1, 2026

Public pension executives have joined the ranks of government employees receiving seven-figure compensation. At CalPERS, the chief investment officer collected more than $2.26 million. At Texas Teachers, public-records reporting identified 22 employees receiving at least $1 million in 2024. Wisconsin’s investment board had eight employees above $1 million in its 2025 payroll records.

The biggest college football coaches still earn far more. But public pension staff have entered the compensation territory occupied by many university coaches—and their performance is much harder for the public to judge.

A football coach cannot quietly replace a loss with an appraisal of what the team might have been worth. Pension investment performance, especially where private equity is involved, depends on valuation judgments, reporting conventions and benchmarks that ordinary beneficiaries cannot readily reproduce.

When those same numbers help determine employee bonuses, the people overseeing the investments have a financial interest in the scoreboard.

Millions in pay and a growing national pattern

Pension organization	Documented compensation finding
CalPERS	CIO Stephen Gilmore received $2,260,469 for FY2024–25, including $1,541,719 in annual incentive pay.
CalPERS	CEO Marcie Frost who was hired without even a college degree received a $1.15 million incentive award in September 2026, putting her package above $1.7 million when combined with base salary.
Texas TRS	CIO Jase Auby received nearly $2.2 million in 2024; 21 other employees also received at least $1 million.
Wisconsin Investment Board	Eight employees exceeded $1 million in reported 2025 pay; executive director/CIO Edwin Denson received approximately $1.90 million.
Washington State Investment Board	CEO Allyson Tucker received $725,600 and CIO Christopher Hanak $677,900 in reported 2024 earnings.

These are different reporting periods and compensation measures, rather than a single national ranking. Texas’s unusually large 2024 payout included previously withheld awards. That distinction matters, but it does not erase the scale of the compensation.

Sources: CalPERS compensation analysis and disclosure references, CalMatters on Frost’s September 2026 award, Texas public-records reporting, Wisconsin payroll records, Washington CEO records, Washington CIO records, and Kentucky salary records.

Ohio STRS and the favorable performance number

The most pointed evidence comes from Allen Mendenhall and Dan Sutter’s 2026 paper, Retirement at Risk: The Political Economy of Public Pension Governance.

For 2003–2022, the researchers found that Ohio STRS’s reported investment return exceeded the return they reconstructed from audited financial information in 19 of 20 years. The average difference was approximately 0.33 percentage points annually. They connect the reported measure to investment-staff incentive compensation.

Their estimated $9.3 billion compounded discrepancy is not a finding that employees received $9.3 billion in improper bonuses. It measures the cumulative difference under their calculation.

The paper raises a serious governance question. It does not independently prove intentional falsification or show that private-equity marks caused the entire gap. Differences in cash-flow timing, valuation dates and methodology can systematically affect comparisons; the two return measures must be reconciled before treating the discrepancy as established fraud.

But beneficiaries should not have to take the investment department’s preferred number on faith when that number helps determine its pay.

CommonSense’s July analysis and August follow-up argued that STRS’s reliance on GIPS compliance and performance verification did not resolve the underlying discrepancy. The appropriate answer is a public, independently reviewed reconciliation.

Source: Mendenhall and Sutter’s paper.

Private equity makes the scoreboard harder to check

Publicly traded securities have observable prices. Private-equity interests generally depend on periodic fair-value estimates, often supplied by the managers running the partnerships. Those estimates can be reasonable and still differ materially from the proceeds available in an actual sale.

A valuation increase can therefore contribute to reported pension performance before the pension receives cash from an exit. If that reported performance triggers employee bonuses, staff can be rewarded before the underlying economic result is realized.

Lagged valuations and appraisal-based benchmarks add further complications. They can postpone recognition of market changes and make returns appear smoother. Their effects vary with market conditions; they do not automatically inflate every return.

The incentive problem remains: staff paid for reported outperformance have a personal stake in the valuations and measuring rules. Boards should place those decisions under independent oversight, especially when subsequent write-downs may arrive after bonuses have been paid.

The consultant helps set the pay scale

CommonSense’s September article on Global Governance Advisors examined GGA’s work involving CalPERS and STRS Ohio and its identification of OMERS Ventures among its clients.

The broader concern applies to compensation consulting throughout the industry. Selecting highly paid peers can justify a larger compensation opportunity. Other pensions can then use that newly enlarged package in their own comparisons.

Washington’s official budget materials explicitly describe increases intended to bring investment salary ranges up to peer averages. Florida SBA’s 2025 compensation discussions compared its incentive opportunities with California’s and involved a Mercer benchmarking study.

Those records show how the upward pressure travels. They do not prove that consultants falsified investment returns. They show why trustees must scrutinize both the performance benchmark used to earn a bonus and the compensation benchmark used to enlarge it.

Sources: Washington budget explanation and Florida SBA meeting materials.

Boards must make the bonus calculation reproducible

Pension systems argue that competitive compensation attracts talent and that internal investment management can cost less than outside managers. That argument deserves a fair test: independently measured net returns, appropriate risk comparisons and documented savings.

It cannot be settled by pointing to a high return in a rising market, an easy policy benchmark or another pension’s larger paycheck.

Before approving extraordinary incentive compensation, trustees should require:

• Public reconciliation of the return used for bonuses with audited financial information.
• Long-term performance after all investment costs, compared with transparent, investable alternatives.
• Independent review of private-asset valuations and every material benchmark change.
• Meaningful deferral and clawbacks when later valuations or realized exits undermine the results that generated bonuses.
• Disclosure of compensation peer groups, by location like Columbus and Sacremento consultant relationships and each employee’s actual incentive payments.

Public pension staff manage workers’ deferred wages. When they seek compensation approaching the pay of university coaches, beneficiaries deserve a scoreboard they can verify—and a board willing to challenge the people being paid by it.

 https://commonsense401kproject.com/2026/09/19/the-consultant-behind-the-public-pension-pay-machine-gga-helped-legitimize-excessive-pay-at-calpers-strs-ohio-ontario-omers/    

CalPERS: sets its own Excessive Pay – off the Charts

Ohio STRS Responds to Charges It Gamed Its Own Bonuses — With More Games

New Academic Paper -Ohio STRS Had Two Performance Numbers—And Used the Better One to Pay Bonuses

Warren and Sanders demand answers from Trump’s Labor Department about fake support for private equity, private credit and cryptocurrency

On September 25, Senators Elizabeth Warren and Bernie Sanders sent the Department of Labor a letter containing a question that should stop its proposed alternative-assets rule in its tracks:

Who manufactured nearly 12,000 public comments supporting the effort to open workers’ 401(k) accounts to private equity, private credit, cryptocurrency and other alternative assets?

The comments were supposed to demonstrate grassroots enthusiasm for putting Wall Street’s most opaque, illiquid and expensive products into ordinary retirement plans.

Instead, Bloomberg found five nearly identical templates submitted in similar daily quantities over roughly one week. The supportive comments lacked signatures and meaningful personalization. People whose names appeared on them said they had not submitted them. At least one purported commenter had reportedly been dead for approximately five months.

That is not grassroots support.

It is astroturf—with retirement money at stake.

And the senators’ letter raises an even more disturbing possibility: the Labor Department may have procedures that allow comments submitted under stolen or misused identities to remain in the rulemaking record.

DOL has until October 8 to explain itself

Warren, the ranking member of the Senate Banking Committee, and Sanders, the ranking member of the Senate HELP Committee, directed their questions to Acting Labor Secretary Keith Sonderling and EBSA Assistant Secretary Daniel Aronowitz. They requested answers by October 8, 2026.

Their questions go well beyond asking whether a few names were inaccurate. They ask DOL to disclose:

• its current guidance for comments containing potentially false identity information;
• whether that guidance has changed since 2019;
• whether identity-misused comments are merely relabeled as anonymous and left online;
• whether DOL is investigating Bloomberg’s findings;
• whether the investigation is attempting to identify the individual, company, organization or other entity that submitted or coordinated the comments;
• what submission metadata—including IP-address information—DOL retains and reviews;
• what controls detect mass submissions under different names; and
• whether DOL will authenticate the suspect comments before relying on them or claiming public support for the rule.

Those are exactly the right questions.

But DOL should answer one more:

Will it suspend this rulemaking until it can establish the integrity of the administrative record?

The most alarming part may be DOL’s existing policy

The Warren–Sanders letter points to a 2019 Government Accountability Office review of federal comment procedures. According to GAO, DOL guidance said that when someone falsely claims to be a commenter, the identifying information is removed, the comment is treated as anonymous—and the comment remains posted.

GAO also found that DOL’s guidance did not explain how officials determine that a submission used false identity information.

Think about what that means in this docket.

If someone borrowed thousands of names to manufacture support for Wall Street’s preferred rule, DOL’s apparent response might be to erase the names but preserve the manufactured advocacy as anonymous public opinion.

That would solve the identity problem by protecting the fake campaign instead of protecting the people whose identities were misused.

The Administrative Procedure Act may not require agencies to authenticate every commenter. But no serious rulemaking process should treat 12,000 coordinated, possibly unauthorized submissions as equivalent to 12,000 independent expressions of public support.

A template repeated 12,000 times is not 12,000 analyses.

And a stolen name is not a vote.

This is not DOL’s first fake-comment warning

The letter reminds DOL that the problem is not new.

In 2017, The Wall Street Journal examined comments concerning DOL’s earlier fiduciary rule. Forty percent of the individuals contacted reportedly said they had not written the comments attributed to them. Most of the 345 comments examined criticized the fiduciary rule and aligned with Wall Street’s policy position.

GAO later examined public-comment data that included EBSA submissions and estimated that between 5% and 30% of presumed commenters may not have submitted the comments attributed to them.

DOL therefore cannot credibly say it had no warning that its electronic comment system was vulnerable to identity misuse and coordinated flooding.

It was warned.

The same agency is now considering a rule that could channel trillions of dollars of defined-contribution assets toward industries desperate for new capital.

Follow the money, not the fake names

The proposed rule would establish a safe harbor for fiduciaries selecting investments containing private equity, private credit, digital assets and other alternatives.

The industries benefiting from that rule have an obvious economic interest in portraying it as a popular democratization of investments once reserved for wealthy institutions.

But the authentic comment record points in the other direction. According to the senators, more than 30,000 opposing comments generally included identifying details such as a city, state or email address. The nearly 12,000 suspect supportive comments lacked comparable personalization.

That does not prove which person or organization created them. It does establish why DOL must preserve and examine the electronic evidence before finalizing anything.

The investigation should follow:

• IP addresses and submission timestamps;
• browser, device and platform metadata retained by Regulations.gov or DOL;
• identical formatting, typographical artifacts and template variants;
• referral links and campaign landing pages;
• vendors or consultants that generated or transmitted the submissions;
• payments by asset managers, insurers, crypto interests, trade associations or advocacy groups;
• communications involving DOL, White House or industry personnel; and
• whether anyone presented the manufactured volume to policymakers as proof of genuine public support.

The relevant question is not merely whose names appeared on the comments.

It is who paid for the campaign, who executed it, who knew about it and whether anyone inside government relied on it.

The sales pitch being amplified was already misleading

The suspect comments did not arise in a vacuum. They supported an industry campaign built around claims that alternative assets will democratize opportunity, improve returns and diversify retirement portfolios.

But, as CommonSense previously explained in “Private Equity’s New 401(k) Sales Pitch: Fake Diversification From Smoothed Numbers”, much of private equity’s reported diversification advantage can be an artifact of valuation.

Public stocks confess their volatility every trading day. Private funds report valuations periodically, often using manager models and stale inputs. That can produce:

Smoothed NAV → lower reported volatility → lower reported correlation → higher reported Sharpe ratio → apparent diversification.

The economic risk did not necessarily disappear.

The ruler changed.

If thousands of manufactured comments were used to amplify a sales pitch already dependent on smoothed numbers, DOL faces two different integrity problems:

1. Were the commenters authentic?
2. Were the investment claims authentic?

A prudent fiduciary must demand unsmoothed volatility, stress-period correlations, secondary-market discounts and appropriate liquid comparators before accepting the claim that private equity reduces target-date-fund risk.

The contracts tell a different story from the marketing

CommonSense also reviewed actual private-equity limited-partnership agreements in “The Contracts Private Equity Doesn’t Want 401(k) Participants to See”.

Those agreements reveal an industry that understands ERISA extremely well—and drafts elaborate machinery to keep ERISA from following plan money into underlying fund assets.

The contracts use venture-capital-operating-company exceptions, benefit-plan-investor thresholds, feeder funds, parallel vehicles, alternative investment vehicles, conduit entities and other structures. They disclose potential monitoring, transaction, advisory, financing, breakup, director and affiliated fees. They include transfer restrictions, manager-controlled valuations, indemnification provisions and limitations on withdrawal.

The participant may see only:

Target Date 2055 Fund

Underneath that label may sit:

Target-date CIT → private-market CIT or feeder → conduit vehicle → private-equity partnership → portfolio company.

The industry’s public message is democratization.

Its private contracts are about control, confidentiality, fees, valuation, liquidity and avoiding look-through fiduciary status.

Before DOL offers fiduciaries a safe harbor, it should require them to obtain and analyze every governing contract below the target-date fund. If the industry says the new 401(k) contracts will be different, the answer is simple:

Show them.

Liquidity is where the deception can become a participant loss

The proposed rule identifies liquidity as one of six fiduciary factors. But liquidity cannot be reduced to a checklist entry.

As CommonSense explained in “Liquidity Is a Retirement Risk ERISA Fiduciaries Need to Start Taking Seriously”, there are two separate questions:

1. Can the participant get out?
2. Can the plan or target-date fund get out of its underlying investment?

A participant may trade a target-date fund every day even though its private-equity, private-credit or insurance holdings cannot be sold daily at their reported values.

Someone must provide that liquidity. During normal markets it may come from new contributions or sales of public securities. During stress, redemptions can force the liquid portion of the fund to shrink while stale private assets remain. Funds may impose gates, sell assets at discounts or shift losses toward participants who stay behind.

That creates a first-mover problem inside an investment marketed as a simple retirement default.

The central valuation question is equally simple:

If an asset cannot be sold for its reported value, why should its reported value be treated as real?

An asset does not become liquid because a CIT prints a daily unit value. Private equity does not become less volatile because its manager marks it quarterly. And a retirement fund does not become diversified merely because daily-priced public securities are combined with manager-valued private assets in one spreadsheet.

DOL should not finalize a rule built on a contaminated record

The nearly 12,000 suspect comments do not, by themselves, prove that DOL officials participated in or knew about the campaign. They do not identify the sponsor. They do not prove that every supportive comment was unauthorized.

That is why an investigation is necessary.

But DOL should not exploit uncertainty created by the missing investigation. It should not count questionable comments, leave them posted as anonymous support, summarize them as evidence of public sentiment or finalize the rule before determining who submitted them.

At minimum, DOL should:

1. preserve all comments, submission metadata and internal communications;
2. identify the common source or sources of the five templates;
3. notify people whose identities were apparently used without authorization;
4. flag disputed comments publicly rather than silently relabeling them anonymous;
5. disclose the number of suspect comments and exclude them from any characterization of public support;
6. refer potential violations to DOJ and the DOL Inspector General;
7. release the methodology and findings of its authenticity review; and
8. withdraw or suspend the proposed rule until the administrative record is trustworthy.

Bottom line

Private equity wants access to workers’ retirement savings.

Its sales pitch relies on smoothed valuations that can manufacture apparent diversification. Its contracts hide fees, conflicts, control and illiquidity beneath layers of entities. And now its political support appears to include nearly 12,000 public comments that may themselves have been manufactured.

The pattern is hard to ignore:

Smoothed numbers manufacture lower risk.

Secret contracts manufacture plausible deniability.

Fake comments manufacture public support.

DOL should not provide a safe harbor for private markets while its own public-comment process may have become a harbor for astroturfing.

Before the Department puts private equity into America’s 401(k) default funds, it must tell the public who tried to put dead people and stolen identities into the rulemaking record.

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Primary sources and related CommonSense analysis

• Warren–Sanders letter to Acting Labor Secretary Keith Sonderling and EBSA Assistant Secretary Daniel Aronowitz, September 25, 2026
• Senate Banking Committee announcement
• DOL rulemaking docket EBSA-2026-0166
• GAO-19-483: Federal Rulemaking—Identity Information in the Public Comment Process
• GAO-20-383R: Selected Agencies’ Management of Public Comments
• GAO-21-103181: Public Comment Data and Their Limitations
• Private Equity’s New 401(k) Sales Pitch: Fake Diversification From Smoothed Numbers
• The Contracts Private Equity Doesn’t Want 401(k) Participants to See
• Liquidity Is a Retirement Risk ERISA Fiduciaries Need to Start Taking Seriously