The Department of Labor issued a proposed rule that would expand access to alternative assets such as private equity and cryptocurrency in 401(k) plans.
Background: Traditionally, fiduciary duties under the Employee Retirement Income Security Act (ERISA) have restricted plan providers from including assets considered riskier and/or those that cannot be backed by certain liquidity thresholds.
- The Biden administration previously issued guidance specifically restricting access to alternative assets such as private equity in 401(k) plans.
- President Trump issued an executive order in August 2025 calling for the DOL to issue new regulations “democratizing access to alternative assets for 401(k) investors” with the intent of giving access to the higher returns that these assets can achieve.
The proposed rule: The DOL proposal would create a new safe harbor for fiduciary duties under ERISA in selecting investment options for participant retirement plans (such as 401(k) plans). Specifically, the safe harbor would create a rebuttable presumption that the plan had satisfied its ERISA duty of prudence. The new safe harbor is meant to “alleviate certain regulatory burdens and litigation risks” to expand access to alternative investments such as private equity, real estate, cryptocurrency, and commodities. The safe harbor for plan investments would be based on six non-exhaustive factors, including:
Risks remain: One of the main reasons plan providers have shied away from the type of assets this rule seeks to enable access to is because of the high risk of litigation they carry, due primarily to associated higher risk levels and excessive fees.
The bottom line: While the proposed rule would certainly greenlight inclusion of alternative assets into retirement plans, it would not fully insulate plan providers from liability risks.
