On Aug. 7, President Trump signed an executive order (EO) titled “Democratizing Access to Alternative Assets for Retirement Savers,” directing the Department of Labor (DOL) and other federal agencies to facilitate broader inclusion of alternative assets, such as private equity, private credit, real estate and digital assets, within 401(k) and other defined-contribution retirement plans.
The administration believes the EO will promote diversification and lead to higher returns for 401(k) investors and retirees. Some Democratic lawmakers have criticized the order, however, arguing that it could weaken safeguards against high-risk investments.
Background
Prior to the issuance of the President Trump’s EO aimed at expanding retirement savers’ access to alternative assets, Congress had already engaged in addressing this issue.
In May 2025, Sen. Steve Daines (R-MT) urged the White House to establish a regulatory safe harbor that would enable defined contribution plan sponsors to include alternative investments, such as private equity, private credit, infrastructure and digital assets, in 401(k) offerings without the fear of excessive litigation. He highlighted the disparity between institutional and retail investors, emphasizing that current regulations create a two-tiered system that limits retail investors’ opportunities to benefit from diverse asset classes.
In contrast, Sen. Elizabeth Warren (D-MA) voiced concerns beginning in June 2025 through multiple letters to financial firms offering private market investments within retirement plans. She raised issues related to high fees, illiquidity, valuation transparency and overall suitability for average savers, emphasizing the need for robust consumer protections and fiduciary responsibilities.
EO Provisions
President Trump’s EO directs the Department of Labor (DOL) to review and potentially rescind existing guidance that limits fiduciaries’ ability to include such investments in defined-contribution plans. Specifically, the EO:
- Requires the secretary of labor to reexamine all past and current guidance under the Employee Retirement Income Security Act of 1974 (ERISA), including the December 2021 Supplemental Private Equity Statement, within 180 days.
- Instructs the DOL to issue updated rules or guidance clarifying how fiduciaries may prudently assess the use of alternative assets in retirement plans, including criteria for balancing fees versus returns and possibly establishing safe harbors.
- Urges the DOL to address ERISA litigation risks that may deter fiduciaries from adopting broader investment strategies.
- Directs coordination between the DOL, Department of the Treasury (“Treasury”), and Securities and Exchange Commission (SEC) to align relevant regulations, particularly around accredited investor and qualified purchaser status.
- Expands the definition of “alternative assets” to include private market investments, real estate, commodities, digital assets, infrastructure and longevity risk-sharing pools.
Next Steps
We expect the DOL to begin implementing this EO immediately, working closely with the Treasury and the SEC on coordination. If the department rescinds prior guidance and provides new safe harbor provisions, we anticipate that retirement plan sponsors and fiduciaries may become more willing to offer investment options containing alternative assets. This could result in expanded use of asset allocation funds that mirror institutional strategies more closely. The SEC’s involvement in potentially revising accredited investor rules could also lower the threshold for ordinary investors to access these assets, although such regulatory changes are complex and may take considerable time.
Our team maintains ongoing engagement with senior officials and policymakers within the DOL, Treasury and SEC, and we will be monitoring future developments in the evolving regulatory and legislative landscape. To gain more insight on the DOL, Treasury and SEC action, please contact a member of the Brownstein team.
Brownstein will continue to track all of President Trump’s executive orders.
