Letter to ERISA Advisory Council on Hedge Funds’ Benefit to Pensions and Beneficiaries

November 01, 2011

From: MFA, Richard H. Baker


Employee Retirement Income Security Act Advisory Council, ERISA Advisory Council,
U.S. Department of Labor

MFA submitted a written statement to the ERISA Advisory Council in connection with an Advisory Council meeting on November 8 and 9 to finalize recommendations to the Department of Labor regarding several topics, including potential DOL guidance or best practices related to pension plan investments in hedge funds and private equity funds. In our letter, we explained the benefits to benefit plans and their beneficiaries of plan investments in hedge funds. We also encouraged the Advisory Council to coordinate any best practices or guidance from the Council or the DOL with existing guidance from the Presidents Working Group on Financial Markets Investors Committee as we believe the Investors Committee recommendations provide valuable guidance to plan fiduciaries when investing in hedge funds. We explained that inconsistent or conflicting guidance from the DOL could create uncertainty for plan fiduciaries and have a chilling effect on plans that seek the benefits of investing in hedge funds, to the detriment of the plans and their beneficiaries.