FOR IMMEDIATE RELEASE
Wednesday, June 3, 2020
Contact: firstname.lastname@example.org or 202-618-6433
Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued the following statement in response to today’s announcement by the Department of Labor on opening up defined contribution plan investments in private equity.
“The last thing the Department of Labor should be doing is enabling or encouraging retiree money to be diverted from transparent public markets with significant disclosure and investor protections to high-risk, dark private markets with little disclosure and few investor protections. To use the pandemic as a pretext for this irresponsible action is adding insult to injury.
“The private equity part of private markets are some of the riskiest investments with extremely high-leverage and very high fees. Additionally, while the Secretary plays salesman for private equity, claiming ‘strong returns,’ the truth is that private equity performance and returns have often been poor at best, no doubt because the business model is often predatory. While couched in innocuous rhetoric of ‘leveling the playing field’ and ‘choice’ for Main Street investors, these investments are simply not where hardworking Americans saving for retirement should be putting their nest eggs.
“This is just the latest example of this Department of Labor putting retirees’ best interests last. The Obama administration passed a strong, effective fiduciary duty rule that required investors’ best interests to be first, but the Trump administration killed that rule. Without the protection of that rule, it is doubly dangerous for retirees to be investing in private markets and private equity.”
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.