The Trump administration has proposed a rule that would allow American workers to invest their 401(k) retirement savings in private equity, cryptocurrency, real estate, and a broader range of alternative assets — a policy shift that could reshape how tens of millions of Americans build wealth for retirement.
The proposal, released by the U.S. Department of Labor on March 30, 2026, carries the formal title “Fiduciary Duties in Selecting Designated Investment Alternatives.” It establishes a process-based safe harbor for fiduciaries’ selection of investment options, following President Trump’s Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors,” issued on August 7, 2025, which asserted federal policy to open 401(k) investments to alternative assets. The rule now enters a 60-day public comment period before it can be finalized.
What the Rule Actually Does
The proposed rule provides that a prudent fiduciary has maximum discretion to select investments to further the purposes of the plan, confirming that ERISA does not require or restrict any specific type of investment option. In practical terms, this means plan managers who follow the rule’s prescribed process will receive a legal presumption of having acted prudently — reducing the litigation exposure that has historically discouraged retirement plan administrators from including less traditional assets.
There are already no explicit restrictions on including alternative assets like cryptocurrency, real estate, or private-market assets in 401(k) plans, though fiduciaries have treaded carefully on them out of fear that those assets may be challenged legally. The new rule addresses that hesitation directly by building a documented, defensible process fiduciaries can follow.
The Labor Department rule creates a safe harbor that can help shield plan sponsors from litigation. It identifies six factors for a plan fiduciary to objectively, thoroughly, and analytically consider when selecting alternative investments. The six factors are performance, fees, liquidity, valuation, performance benchmarks, and complexity. A fiduciary who follows the prescribed process for each of those six factors is presumed to have satisfied the duty of prudence under ERISA’s Section 404(a)(1)(B).
The rule does not mandate that any plan include alternative assets. It does not instruct fiduciaries on how to invest. A Labor Department official said the rule was not telling providers how to invest and was not shaped by market moves. “We’re giving them the toolkit so that they can follow an analytical, thorough, and objective process,” the official said.
The Scale of the Market at Stake
The Labor Department said the proposed rule would apply to over 720,000 retirement plans covering roughly 90 million Americans. Americans currently hold over $10 trillion combined in 401(k) plans. The White House’s Office of Information and Regulatory Affairs labeled the rule “economically significant” during its review, a classification that signals the administration expects the proposal to have a measurable effect on the broader $13.9 trillion defined-contribution market.
Alternative asset managers stand to gain meaningful access to a capital pool that has historically been reserved for institutional investors and the ultra-wealthy. Apollo CEO Marc Rowan said that the change is a “thoughtful step toward addressing the growing retirement crisis,” noting that “Americans increasingly lack the savings and income needed for a secure retirement” and that the shift could “meaningfully improve retirement outcomes.” BlackRock, the Managed Funds Association, and the Defined Contribution Alternatives Association have all expressed support for the proposed rule.
How the Policy Arrived Here
The proposal follows a policy shift from the Biden administration’s 2021 rescission of guidance issued during Trump’s first term, which had signaled comfort with private equity investment, and other Biden-era sub-regulatory guidance that had cautioned retirement plans against investment in cryptocurrency and other products tied to the value of cryptocurrencies due to risk concerns.
The Biden administration in 2022 issued a compliance release that warned fiduciaries against including cryptocurrency options in 401(k) plans, which the Trump administration criticized as a “departure from the department’s decades-long approach to fiduciary investment decisions.” That guidance was subsequently rescinded. The March 30 proposed rule is the formal regulatory architecture that replaces it.
Labor Secretary Lori Chavez-DeRemer framed the proposal as a corrective measure. “This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today,” she said in a statement accompanying the release.
What Legal Experts Are Watching
Despite the momentum behind the rule, legal analysts are cautioning that adoption will likely be gradual rather than immediate. “We remain skeptical that this will encourage fiduciaries to include alternatives in 401(k) plans until the courts have concurred that this language protects advisors from litigation,” Jaret Seiberg, financial services and housing policy analyst at TD Cowen, wrote in a research note. “That means it could be several years before we see the real impact from this proposal.”
The DOL acknowledged that the proposed rule would provide persuasive authority regarding what constitutes a prudent process, but the Supreme Court’s removal of Chevron deference means the rule would be afforded a lower level of deference than agencies previously received. Fiduciaries and their legal counsel will be watching early court cases closely before moving to expand plan menus with alternative assets.
Erin Cho, a partner at the Mayer Brown law firm, said that the rule “will not open the floodgates for private equity, private credit or crypto funds to move into the retirement space,” and that investors would likely only obtain limited exposure through vehicles such as target-date funds. Additional hurdles — including accreditation requirements for standalone private funds and the relative illiquidity of alternative assets — may require action from the SEC or Congress before broader adoption becomes viable.
Consumer Advocates Push Back
Not everyone views the proposed rule as a step forward. Consumer organizations and prominent legislators have raised concerns about exposing ordinary retirement savers to assets with greater volatility, complexity, and fee burdens. Senator Elizabeth Warren, a vocal critic of the proposal, argued that as private equity returns have reached multi-year lows and cryptocurrency markets remain volatile, the timing works against the interests of workers who depend on defined-contribution plans for retirement security.
The proposed rule does not completely bar potential claims by plan participants arising from risky investment decisions or excessive fees associated with alternative assets. Fiduciaries would also continue to be prohibited from selecting a designated investment alternative that is otherwise illegal. Consumer groups are expected to submit substantive comments during the 60-day window, and the final rule may be shaped by that feedback.
What Comes Next
The 60-day public comment period is now open. The Labor Department has indicated it hopes to finalize the rule by the end of 2026. If finalized as proposed, the rule would add momentum to the existing trend of target-date funds and other diversified retirement vehicles incorporating alternative asset allocations — a market that has been building slowly but may accelerate if fiduciaries gain greater legal comfort.
For American workers, the near-term impact is likely to be limited. Plan menus will not change overnight, and most employees will not wake up to find private equity or cryptocurrency options in their 401(k) lineups without significant additional steps from plan sponsors and investment committees. But the regulatory foundation for that shift is now formally in place, and the direction of federal policy is clear.
Financial Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. The proposed rule discussed herein has not been finalized and is subject to change following a public comment period. Readers should consult a qualified financial advisor or legal professional before making any decisions related to their retirement accounts or investment strategies. Past performance of any asset class is not indicative of future results.
