New Order Directs Federal Agencies to Expand 401(k) Investment Options

On August 7, 2025, President Donald Trump issued an executive order titled Democratizing Access to Alternative Assets for 401(k) Investors. The order directs federal agencies to review existing guidance regarding alternative investments in 401(k) and other defined-contribution retirement plans and instructs them to take steps to make these assets more accessible to plan participants.

Key Highlights

According to the order, retirement plan participants should have access to funds that include investments in alternative assets “when the relevant plan fiduciary determines that such access provides an appropriate opportunity for plan participants and beneficiaries to enhance the net risk-adjusted returns on their retirement assets.”

Specifically, the order directs the U.S. Department of Labor (DOL) to:

Reexamine its guidance on a fiduciary’s duties regarding alternative asset investments in ERISA-governed 401(k) and other defined-contribution plans;
Clarify its position on alternative assets and the appropriate fiduciary process associated with offering asset allocation funds containing investments in alternative assets; and
Consult with the Secretary of the Treasury, the Securities and Exchange Commission (SEC), and other federal regulators to determine whether parallel regulatory changes should be made to align with the order’s objectives.

In addition, the order directs the SEC to revise applicable regulations and guidance to facilitate access to alternative assets for participant-directed defined-contribution retirement savings plans.

DOL Supporting Statement

The DOL separately released a statement on August 7, 2025, applauding the executive order and highlighting the DOL’s recent rescission of prior guidance that, according to the agency, disadvantaged cryptocurrency in 401(k) plans. The DOL noted that the executive order “further supports [its] efforts to improve flexibility and eliminate unfair one-size-fits-all approaches[.]”

The White House also released a fact sheet summarizing the executive order’s intent and scope.

Action Steps

Plan fiduciaries overseeing or permitting investments in digital assets or other alternative investments should continue to closely monitor for regulatory developments in this area and consult with their benefit advisors to ensure full compliance with ERISA’s fiduciary responsibilities.

Alternative Assets

The order defines “alternative assets” as follows:

Private market investments, including direct and indirect interests in equity, debt, or other nonpublicly traded financial instruments, including those where investment managers may seek to take an active role in the management of such companies;
Direct and indirect real estate interests, including real estate-backed debt instruments;
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 and development; and
Lifetime income investment strategies, including longevity risk-sharing pools.