President Trump has signed an executive order that directs federal agencies to facilitate access to certain alternative asset investments for participant-directed defined-contribution retirement savings plans by revising applicable regulations and guidance.
Our Take: The Order requires regulatory action, which will take some time. It seeks to retain the key role of a fiduciary in making decisions relating to the inclusion of a defined set of alternative asset investments, which does not include all private funds or opportunities but does include private equity, private credit, real estate, and digital assets. Guidance and clarification by regulators of the duties owed by fiduciaries in this context and possible safe harbors will be welcome. However, while the Order directs regulators to “prioritize actions that may curb ERISA litigation that constrains fiduciaries’ ability to apply their best judgment in offering investment opportunities to relevant plan participants,” ultimately Congressional action may be necessary on this point.
On August 7, 2025, President Donald Trump signed an executive order (the Order) titled “Democratizing Access to Alternative Assets for 401(k) Investors.” The Order states the “Administration will relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement.” The Order further provides that it is the policy of the United States that every American have access to funds that include investments in alternative assets in planning for retirement when the applicable plan fiduciary determines that such access is appropriate.
Alternative Assets. The Order defines “alternative assets” as follows:
- private market investments, including direct investments in equity, debt or other financial instruments that are not traded on public exchanges (i.e., private equity investments)
- direct and indirect investments in real estate
- holdings in actively managed investment vehicles that invest in digital assets
- direct and indirect investments in commodities
- direct and indirect interests in projects financing infrastructure development
- lifetime income investments strategies including longevity risk-sharing pools
Direction to the Department of Labor (DOL). The Order directs the Secretary of Labor to take the following actions:
- Within 180 days of the date of the Order,
- reexamine the past and present guidance issued by the DOL regarding fiduciary duties applicable to offering asset allocation funds that include alternative assets (including whether to rescind the DOL’s December 21, 2021, Supplemental Private Equity Statement, which generally indicates that the DOL does not endorse or recommend that a plan offer an asset allocation fund with a private equity component).
- clarify the DOL’s position on alternative assets and the appropriate fiduciary process under the Employee Retirement Income Security Act of 1974, as amended (ERISA), with respect to offering asset allocation funds containing alternative assets. The Order provides that this clarification should identify the standards to be used by fiduciaries in weighing the potentially higher expenses of alternative assets against the aims of seeking higher long-term net returns and increased diversification of investments. According to the Order, the guidance issued by the DOL may include appropriate safe harbors relating to the fiduciary duties applicable to deciding whether a plan should offer an asset allocation fund that includes investments in alternative assets and should prioritize actions to limit ERISA litigation.
- Consult with the Secretary of the Treasury, the Securities and Exchange Commission (SEC) and other federal regulators, as necessary, to fulfill the purpose and policy of the Order, including to determine whether parallel regulatory changes should be made by the SEC or other federal regulators.
Directions to the SEC. The Order also directs the SEC to consider ways to facilitate access to investments in alternative assets by 401(k) plans and other defined contribution plans that permit participants to direct investments in their plan accounts, including by revising guidance relating to the accredited investor and qualified purchaser status.
This Order is consistent with action the DOL took earlier this year, on May 28, 2025, to rescind a 2022 compliance release (Compliance Assistance Release No. 2022-01) that cautioned fiduciaries to “exercise extreme care” before adding a cryptocurrency option to a plan’s investment menu. The May 2025 release (Compliance Assistance Release No. 2025-01) stated that it “restore[d] the Department’s historical approach by neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate.”
The availability of investment options that include alternative assets under defined contribution plans will expand, but the nature and scope of such expansion will not be clear until there is additional regulatory guidance and regulation, and possible Congressional action.
