Legis
Finance
Executive order · Thursday 7 August 2025

Democratizing Access To Alternative Assets For 401(k) Investors

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  • Background

    • Wealthy Americans and government workers have access to alternative assets, but most of the 90 million participants in defined-contribution plans do not.
    • Fiduciaries must carefully evaluate all aspects of alternative asset investments to safeguard retirement accounts.

  • Previous Action

    • The 2020 information letter from the Administration aimed to promote alternative asset investments in retirement plans.

  • Current Challenges

    • Burdensome lawsuits and prior Department of Labor guidance have limited access to alternative assets, reducing investment opportunities and returns for many Americans.
    • Regulatory overreach has hindered investment innovation for 401(k) and defined-contribution plan participants.

  • New Policy

    • Every American preparing for retirement should have access to investments in alternative assets, as determined appropriate by the plan fiduciary.

  • Definition of Alternative Assets

    • Includes:
      • Private market investments not traded on public exchanges.
      • Real estate interests and debt instruments secured by real estate.
      • Actively managed investment vehicles in digital assets.
      • Commodities investment.
      • Investments in infrastructure development projects.
      • Lifetime income strategies including longevity risk-sharing pools.

  • Mandates for the Secretary of Labor

    • Within 180 days:
      • Reexamine fiduciary duties under ERISA concerning alternative asset investments.
      • Clarify the Department of Labor’s position on these assets and fiduciary processes.
      • Propose rules or guidance that help fiduciaries balance expenses with investment objectives and may include safe harbors.
      • Consult with the Secretary of the Treasury and the SEC to support policy objectives.

  • SEC Responsibilities

    • Consider ways to enhance access to alternative asset investments for defined-contribution retirement plans.

  • Legal and Applicability Statements

    • The order doesn’t affect existing legal authorities or create enforceable rights against the United States.
    • Implementation will align with applicable laws and available appropriations.