Alternative Asset Investments in 401(k) Retirement Plans: Private Equity, Cryptocurrency, Real Estate, and More
On August 7, 2025, President Donald Trump issued an Executive Order titled Democratizing Access to Alternative Assets for 401(k) Investors. The Order is designed to expand access to private equity investment funds, cryptocurrency, real estate and other alternative assets for participants in 401(k) plans governed by the Employee Retirement Income Security Act of 1974 (ERISA), provided plan fiduciaries determine the access is acceptable under required ERISA fiduciary standards.
The Executive Order directs the U.S. Department of Labor (DOL) to:
- Reexamine existing guidance on fiduciary duties under ERISA related to alternative asset investments within 180 days of the Executive Order.
- Clarify DOL guidance on alternative assets in ERISA retirement plans.
- Outline the fiduciary process for including alternative assets in defined contribution plans.
- Propose rules to clarify the ERISA fiduciary duties when considering alternative investments in 401(k) plans which may include safe harbors.
The Order also instructs the Securities and Exchange Commission (SEC) to consider revising regulations and guidance to further facilitate retirement plan participants’ access to these alternative investment opportunities.
A Shifting Regulatory Landscape
Access to alternative investments in retirement plans has long been debated, with regulatory positions shifting depending on the administration.
- 2020: Under the first term of the current administration, the DOL issued an information letter recognizing that private equity could be considered for 401(k) plans.
- 2021: To limit the scope of the prior administration’s DOL pronouncement, under the Biden Administration the DOL issued a Supplemental Private Equity Statement which clarified that this did not constitute an endorsement and issued guidance warning fiduciaries to use “extreme caution” with cryptocurrency in retirement plans.
- May 28, 2025: During the current administration, the DOL’s Employee Benefits Security Administration (EBSA) issued Compliance Assistance Release Bulletin No. 2025-01, revoking its 2022 guidance and easing restrictions on cryptocurrency in 401(k) plans.
- August 12, 2025: Following issuance of the Executive Order, the DOL rescinded the Supplemental Private Equity Statement issued during the prior administration in 2021.
The August 2025 Executive Order represents a significant policy shift for the DOL position under the prior administration as it seeks to reduce regulatory barriers and broaden retirement plan participants’ ability to invest in alternative asset classes.
Fiduciary Responsibilities Remain Paramount
While we wait for further guidance from the DOL pursuant to the Executive Order, ERISA fiduciary duties remain unchanged. Fiduciaries are still subject to strict personal liability for failing to uphold duties of loyalty and prudence.
Key takeaway: While the new Executive Order and EBSA’s recent revocation of prior cautionary guidance potentially open the door to new investment opportunities, plan fiduciaries must continue to apply rigorous due diligence when evaluating all types of investment alternatives for 401(k) plans. Compliance with ERISA fiduciary standards is essential.
How Frier Levitt Can Help
Frier Levitt’s Employee Benefits and Executive Compensation attorneys provide practical, tailored guidance to plan sponsors, retirement plans and fiduciaries navigating the evolving ERISA regulatory environment. From addressing fiduciary duties in evaluating investment options including alternative investments to developing retirement plan compliance processes and mitigating fiduciary risk, our team helps ensure that fiduciaries and retirement plans are compliant with regulatory requirements including under ERISA.
