About Us
The Department of Labor (DOL) proposed a new rule this week that would make it easier for 401(k) plans to offer investment options with exposure to alternative assets, including private equity, real estate, digital assets, and other nontraditional products—if fiduciaries follow a prudent, process-based framework. The proposal stems from President Trump’s Aug. 7, 2025 Executive Order directing regulators to expand access to alternative assets in defined contribution retirement plans. (DOL News Release, March 30)
Proposed Rule
- The proposed rule would clarify fiduciary duties under the Employee Retirement Income Security Act (ERISA) and establish a safe harbor for selecting designated investment alternatives, including asset allocation funds that contain alternative assets. (PoliticoPro, March 30)
- DOL says the rule is intended to reduce regulatory uncertainty and litigation risk that have discouraged plan sponsors from offering broader exposure to private markets and other alternatives in 401(k) plans, even though such investments are not expressly prohibited today.
- Under the proposal, fiduciaries would need to evaluate factors such as performance, fees, liquidity, valuation, benchmarks, and complexity through an objective and analytical process. (DOL News Release, March 30)
Background
- The rule follows President Trump’s Executive Order on “Democratizing Access to Alternative Assets for 401(k) Investors,” which called for regulatory changes to expand access to asset classes previously concentrated in institutional portfolios. (EO, Aug. 7, 2025)
- While alternative investments have long played a role in defined-benefit plans such as pensions, fiduciary obligations and litigation concerns have made it more difficult to include them in participant-directed defined contribution plans like 401(k)s.
- Since the Executive Order, regulators and administration officials have signaled growing support for expanding access to alternative investments—including real estate—while emphasizing the need for appropriate guardrails. (Reuters, March 30)
What to Watch
- The proposal would mark a meaningful shift in the federal government’s approach to alternative investments in retirement plans, particularly by replacing a more cautious posture with a framework centered on fiduciary process rather than asset-class restrictions. (CNBC, March 30)
- The rule could have important implications for real estate and other alternative asset managers if it leads to broader access to private-market exposure through participant-directed retirement plans.
- The proposal does not endorse any specific asset class, and fiduciaries would still be expected to determine whether a particular investment is appropriate for plan participants.
What’s Next
- The proposal is subject to a 60-day public comment period, with DOL signaling it hopes to finalize the rule by year’s end.
Comments are due on June 1, 2026. RER is working on comments and welcomes input from members.