Trump Opens 401(k) Plans to Alternatives in Landmark Retirement Policy Shift
President Trump signed an executive order late Thursday that will allow 401(k) retirement plans to include allocations to alternative investments, including private equity, real estate, and cryptocurrencies. The move represents a historic pivot in U.S. retirement policy and could reshape how millions of Americans save for retirement.
The order directs the Department of Labor to reexamine fiduciary guidance under ERISA, providing clarity on plan sponsors’ responsibilities when offering access to alternative assets. It also calls for coordination with the Treasury Department, Securities and Exchange Commission, and other federal agencies to update rules and promote expanded access across defined contribution (DC) plans.
This policy shift builds on earlier efforts to expand investment flexibility in retirement plans, reversing a 2022 position by the Biden administration that discouraged crypto investments in 401(k)s. Now, firms like BlackRock and Apollo Global Management are preparing product offerings to meet rising demand, potentially unlocking access to over $12 trillion in DC plan assets.
Industry leaders welcomed the decision. David Layton, CEO of private markets giant Partners Group, told Connect Money, “With this Executive Order, the US government has taken a meaningful step towards removing any legal uncertainty for fiduciaries evaluating the inclusion of private markets in DC plans. Ultimately, this will create greater parity between the investment options and retirement outcomes available to beneficiaries in DB and DC plans.”
The Institute for Portfolio Alternatives (IPA) echoed that view, stating: “This order levels the playing field, putting all retirement savers on track to take advantage of the portfolio diversification, reduced volatility, and inflation-resistant returns that alternative investments have to offer.”
As regulatory agencies begin implementing the directive, market participants are expected to respond quickly with new retirement-focused funds and products. Advocates believe the inclusion of alternatives in 401(k)s could improve long-term outcomes for savers, though critics warn that complexity, illiquidity, and valuation transparency remain key challenges for plan sponsors and participants alike.