On August 7, 2025, President Trump issued an Executive Order directing agencies to “reexamine” regulations and guidance for retirement plan administrators to encourage the inclusion of alternative assets, or “alts,” among the investment options available to participants in 401(k) and similar retirement plans. Alts can include funds invested in private equity and cryptocurrencies. 

The EO:  

• Listed direct and indirect interests in private market investments, real estate, digital assets, commodities, infrastructure, and longevity risk-sharing pools.  

• Directed the Department of Labor (DOL) to consider rescinding a Biden-era guidance expressing concern about risks associated with private equity. DOL dutifully rescinded the guidance on August 12, less than a week after Trump’s order, supported by a report from the president’s Council of Economic Advisors touting the supposed benefits of alts for retirement savers.   

• Directed DOL to look for ways to curb litigation under the Employee Retirement Income Security Act of 1974 (ERISA), including possibly expanding “safe harbor” protocols that, if followed, would relieve fiduciaries’ legal liability for losses arising from plan sponsors’ and advisors’ choice of investment options.   

• Directed the Securities and Exchange Commission (SEC) to help facilitate access to alts, including possibly relaxing rules that currently limit some investments to accredited investors or qualified purchasers. 

The DOL and SEC are expected to issue proposed rules for comment on these instructions by early February 2026. 

“Private market” investments include private equity funds, private credit, and other investments that are subject to far fewer regulations than publicly-traded stocks and bonds. Private market investments are normally restricted to sophisticated investors, who are assumed to have enough financial knowledge, experience, and wealth to understand and take on significant risk.  

“Digital assets” include cryptocurrencies – artificially scarce “objects” that can be used as stores of value and means of exchange. Cryptocurrencies operate similarly to currencies issued by governments in some ways, but they are decentralized and privately issued. 

Though offering these and other types of alt investments in participant-directed retirement plans is not explicitly banned under current law, employers and advisors who serve as retirement plan fiduciaries can be sued for including inappropriately risky and costly assets among investment options. Outside of retirement plans, marketing private equity and other largely unregulated alternative assets to small investors is mostly prohibited by securities laws, regulations, and agency guidance—though cryptocurrencies and other digital assets are sold to anyone.  

“Alts” like private equity have so far made little headway in the 401(k) space, though some major players began marketing managed funds with alternative asset components to 401(k) plan sponsors even before Trump issued his executive order.   

Impact:  

This EO targets regulations and guidance that protect retirement savers and also help financial markets steer capital to productive uses for the long-term health of the economy and protect the taxpaying public. To date, Congress has failed to provide low- and moderate-income workers with subsidies that effectively promote retirement saving, while allowing the wealthy to use retirement accounts to reduce taxes on investment income, exacerbating wealth inequality. The SEC and DOL could make matters even worse by giving the green light to opaque alts that wealthy insiders can use to further game the system, while ordinary retirement savers are lured to invest in underperforming, high-cost, and inappropriately risky investments.   

There is a danger that some individual retirement savers will face costs and risks they are unaware of through investing in riskier assets. There is also a larger-scale risk that deregulation will fuel a speculative “bubble” in alternative markets.