Skip to content
Fintech Revolution

Increasing Accessibility for 401(k) Investors to Explore Non-Traditional Financial Options

United States Presidency Orders: Under the authority granted by the Constitution and federal laws, the following is decreed:

,   and  Administrator
3 min read
Expanding Opportunities for 401(k) Investors by Making Alternative Assets More Accessible
Expanding Opportunities for 401(k) Investors by Making Alternative Assets More Accessible

Increasing Accessibility for 401(k) Investors to Explore Non-Traditional Financial Options

In 2025, the U.S. Administration issued an Executive Order titled "Democratizing Access to Alternative Investments for America's Workers," signed by President Trump on August 7, 2025. This policy seeks to expand access to alternative assets—including private equity, real estate, digital assets (cryptocurrency), commodities, infrastructure development projects, and lifetime income strategies—within retirement plans governed by ERISA such as 401(k)s and other defined contribution plans.

Key steps and directives of this policy include:

  1. Federal agency coordination: The Department of Labor (DOL), Securities and Exchange Commission (SEC), Treasury Department, and other regulators are directed to collaborate to facilitate access to these alternative investments.
  2. Clarification and new rules: The DOL is tasked to clarify fiduciary responsibilities within 180 days for offering asset allocation funds that include alternative investments, and to propose new rules or safe harbor protections for plan fiduciaries in managing such investments.
  3. SEC regulatory revisions: The SEC is instructed to consider revising regulations to make it easier for 401(k) participants to access alternative assets, including re-evaluating accreditation and qualified purchaser standards to broaden investor eligibility.
  4. Plan sponsor and recordkeeper guidance: Plans will need to address practical administration challenges, particularly managing illiquid assets that do not offer daily liquidity—a common feature of private equity and real estate investments.
  5. Encouraging diversification and lifetime income products: The order highlights that alternative assets can provide competitive returns and diversification benefits. It also includes a focus on "lifetime income investment strategies" designed to generate stable income in retirement, expanding choices beyond traditional market investments.

While the Executive Order itself does not immediately change ERISA or other regulations, it sets a clear policy direction and mandates regulatory agencies to develop rules and guidance enabling broader participant access to alternative investments in retirement plans. Asset managers are already preparing new product offerings such as collective investment trusts, interval funds, and target date funds incorporating alternatives, positioning the market for these expanded options.

The policy of the United States is to ensure that every American preparing for retirement should have access to funds that include investments in alternative assets, if deemed appropriate by the relevant plan fiduciary. The Secretary of Labor will consider whether to rescind the Department of Labor's December 21, 2021, Supplemental Private Equity Statement. The clarification by the Secretary of Labor must aim to identify the criteria that fiduciaries should use to prudently balance potentially higher expenses against the objectives of seeking greater long-term net returns and broader diversification of investments.

The SEC will consider ways to facilitate access to investments in alternative assets by participants in participant-directed defined-contribution retirement savings plans. The Secretary of Labor will consult with the Secretary of the Treasury, the Securities and Exchange Commission (SEC), and other Federal regulators as necessary to carry out the policy objectives of the order. The costs for publication of this order will be borne by the Department of Labor.

This order does not impair or otherwise affect the authority granted by law to an executive department or agency, or the head thereof. It is important to note that while the order encourages investment in alternative assets for retirement plans, it does not create any enforceable rights or benefits.

[1] White House Fact Sheet: https://www.whitehouse.gov/briefing-room/statements-releases/2025/08/07/fact-sheet-democratizing-access-to-alternative-investments-for-americas-workers/ [2] Department of Labor Fact Sheet: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/alternative-investments-for-retirement-plans [3] SEC Press Release: https://www.sec.gov/news/press-releases/2025/pr2025-123 [4] Asset Manager Preparations: https://www.pensionsandinvestments.com/article/2025-08-14/asset-managers-gear-up-for-alternative-investments-in-401k-plans/1121013

  1. The Executive Order in 2025, signed by President Trump, aims to expand retirement plans' investment options, including real estate, technology, finance, politics, and personal-finance categories like private equity, cryptocurrency, and infrastructure development projects.
  2. The policy mandates federal agencies such as the Department of Labor, Securities and Exchange Commission, Treasury Department, and others to collaborate to ensure plan participants can access these alternative investments more easily.
  3. Asset managers are actively developing new products like collective investment trusts, interval funds, and target date funds that incorporate alternative investments, as the policy seeks to provide a broader choice for retirement savings plans.

Read also:

    Related

    Latest