The U.S. Department of Labor’s Employee Benefits Security Administration released a proposed regulation Wednesday that could fundamentally alter the investment menu inside retirement 401(k) plans, opening the door for millions of Americans to access private equity, infrastructure funds, and other alternative assets through their workplace retirement accounts.
The 153‑page proposal follows an executive order signed by President Donald Trump titled “Democratizing Access to Alternative Assets for 401(k) Investors.” Rather than endorsing any specific asset class, the rule establishes a set of “process‑based safe harbors” designed to protect plan fiduciaries who take a deliberate, well‑documented approach when adding non‑traditional investments to their lineups.
New 401(k) retirement plans rule opens door to private investments
“Our goal is to deliver on President Trump’s promise for a new golden age by fostering a retirement system that allows more Americans to retire with dignity,” said U.S. Secretary of Labor Lori Chavez‑DeRemer. “This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today. This greater diversity will drive innovation and result in a major win for American workers, retirees, and their families.”
Under the Employee Retirement Income Security Act (ERISA), fiduciaries already have the authority to select alternative investments. In practice, however, almost none of the roughly 800,000 private retirement plans have done so.
Industry watchers point to a 2022 compliance release from the Biden administration that warned fiduciaries about the risks of including cryptocurrency options—a move that current officials say departed from the department’s traditional, technology-neutral approach.
New 401(k) rule ends era of government ‘picking winners’
The proposed regulation aims to reverse that cautionary posture. It requires that, when considering any designated investment alternative, fiduciaries must “objectively, thoroughly, and analytically” evaluate factors including performance, fees, liquidity, valuation methods, benchmarks, and complexity. Plans that follow this framework would gain a safe harbor from litigation claiming the selection was imprudent.
“The department’s days of picking winners and losers are over,” said U.S. Deputy Secretary of Labor Keith Sonderling. “Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process. This proposal is decidedly neutral and refrains from saying that any asset class is any better or worse than other investment types, as the law requires.”
Treasury chief calls new 401(k) rule ‘another step in ushering in Trump’s Golden Age’
The regulation was developed in coordination with the Treasury Department and the Securities and Exchange Commission. Treasury Secretary Scott Bessent praised the effort as “another step in ushering in President Trump’s Golden Age,” adding that the proposal broadens access “in a safe and smart manner, … while being mindful of the importance of protecting retirement assets.”
SEC Chairman Paul S. Atkins said the proposal addresses “long‑overdue improvements” and reflects a shared commitment across agencies to help Americans build wealth. “Americans’ ability to participate more fully in innovation and economic growth through well‑diversified long‑term investments is a vitally important priority for effective retirement planning,” Atkins said.
If finalized, the rule would affect more than 156 million workers, retirees, and family members covered by private retirement plans, which together hold roughly $13.8 trillion in assets. The Employee Benefits Security Administration, which enforces ERISA, will accept public comments on the proposal before issuing a final version.
