Mayer Brown has been at the center of the development of 401(k) plans that include private market asset classes. We continue to be at the forefront of helping clients develop some of the most innovative products for the ever-evolving market. We assist the largest and most reputable asset managers in the private markets space. Our success with product development reflects an interdisciplinary team—experienced in bank regulatory, state trust, and tax—that works with clients to:

• Develop, in partnership with trust companies, structures that meet the needs of 401(k) plan investors and protect managers from compliance burdens and unnecessary risk.
• Anticipate regulatory concerns.

Our private credit, private equity, real estate, and registered funds lawyers weigh in to ensure that the terms of the CITs work seamlessly with the terms of the underlying funds and assist with the drafting of disclosure statements. With our large employee benefits practice, where we represent both plan sponsors and retirement investors, we have broad insight into emerging trends and developments and a keen understanding of the commercial, legal, tax, and other sensitivities on all sides of the CIT business.

Our innovation and influence in 401(k) plan product design have also been recognized by the regulators. Our team has worked with the Department of Labor to obtain guidance in support of CITs in the alternative space. Alongside our ERISA litigation partners, we received a request from the Deputy Secretary of Labor to provide education on product innovation that may arise out of the Department’s newly proposed investment duties regulations. We regularly provide thought leadership and participate in leading industry groups who have been at the forefront of the 401(k) alternatives market, including the Defined Contribution Real Estate Counsel (DCREC), the Defined Contribution Alternatives Association (DCALTA), National Association of Real Estate Investment Managers (NAREIM), and the Pension Real Estate Association (PREA).

Representative Experience

• Advising multiple asset managers in structuring and offering CIT products with custom TDFs for 401(k) plans, including an allocation towards their proprietary private equity, private credit, infrastructure, and real estate funds.
• Advising asset managers in structuring and offering CITs where the alternatives manager acts as a sub-adviser to invest in affiliated or unaffiliated private funds.
• Negotiating with managed account providers, target date sponsors, and recordkeepers to enable the 401(k) products of asset manager clients to be included on their platforms.
• Ongoing counseling of global alternatives managers on structuring, offering, and operational compliance of their CIT products for both 401(k) and defined benefit plans and their consistency with market practice.
• Advised the largest managers in structuring the earliest real estate fund products that entered into the 401(k) plan space.

Mayer Brown has extensive experience in providing legal support for annuity products, both in the context of investment funds offered under 401(k) plans, as well as more broadly. With the depth and breadth of our regulatory practices, we are uniquely positioned to advise on bringing lifetime income products to market. In addition to helping clients navigate the complex tax qualification and ERISA fiduciary issues, our seasoned insurance regulatory and transactional team negotiates arrangements with the nation’s most sophisticated insurance companies. We also negotiate agreements with middleware providers and advise on antitrust, cybersecurity, and insurance tax issues that arise.

Representative Experience

• Advising on all aspects of the design and implementation of novel lifetime income solutions jointly provided by large asset managers and prominent life insurers. In connection therewith, negotiating overarching master transaction agreement and all ancillary agreements, including negotiation of all terms and conditions of group annuity contracts and guaranteed investment contracts, preparation of trust agreements and disclosure documents, and advising on participant user tools for enrolling in the products.
• Advising global asset managers on the development of a TDF with in-plan accumulation annuities, including extensive analysis of application of QJSA and QPSA rules, the logistics for purchasing annuities from the insurance company, and the possible exposure to the asset managers in connection with possible violations of the plan qualification rules.
• Advising a global asset manager in connection with the development of a Retirement Income Annuity TDF CIT series that will offer both active and index options. Upon retirement or termination, the plan participant can elect to receive a pro rata portion of his or her account balance in the form of an annuity.
• On behalf of an asset manager client, identified plan qualification issues related to the offering of lifetime income products in the form of deferred annuities and successfully obtained relief from the IRS.