Trump Signs Executive Order Easing Access to Private Investments in 401(k) Plans

President Donald Trump signed an executive order today that encourages inclusion of private equity, cryptocurrency and other alternative investments in 401(k) plans, which would open access to more than $12 trillion in assets held in defined contribution accounts.

The order directs the Department of Labor to clarify its position on alternative investments in DC plans, subject to the Employee Retirement Income Security Act. The order also directs the department to offer guidance on the government’s position regarding fiduciary responsibilities of plan sponsors when offering funds that include exposure to alternative investments.

Trump also directed the DOL to work with the Department of the Treasury, the Securities and Exchange Commission and other federal regulators to consider rule changes that would encourage adoption of the investments. According to the order, the SEC will be tasked with promoting access to alternatives for participant-directed retirement plans by “revising applicable regulations and guidance.”

The order states that it is intended to give Americans “more investment options in order to attain stronger and more financially secure retirement outcomes.” It further states that workers participating in DC plans have restricted access to alternative investments that offer competitive returns and diversification enjoyed by wealth investors and workers who receive pensions.

“The federal government should not be making retirement investment decisions for hardworking Americans, including decisions regarding alternative assets,” Secretary of Labor Lori Chavez-DeRemer said in a statement. “The Department of Labor already took action to rescind the Biden Administration’s guidance that disadvantaged crypto investments. This Executive Order further supports our efforts to improve flexibility and eliminate unfair one-size-fits-all approaches, and I applaud President Trump for taking decisive action.”

‘The Potential’ to Help Fiduciaries

The order “holds the potential for helping fiduciaries have more clarity about process steps they can take to support the fulfillment of their fiduciary duties, which is a significant potential positive,” says David Levine, an attorney at Groom Law Group who advises plan sponsors, advisers and other service providers on employee benefit issues.

The Investment Company Institute also lauded the order, stating that “retirement savers are the ultimate long-term investors and would benefit from the diversification offered by the inclusion of private assets.”

Trump’s executive order helps clear legal hurdles that limit the number of employers who offer retirement plans, continuing an initiative from his first term. In 2020, the DOL issued an information letter stating that retirement plan administrators would not be violating their fiduciary duties under ERISA if they included private equity in their portfolios.

Under former President Joe Biden, the DOL issued an information letter that toned down the one issued by Trump’s DOL.

To be clear, alternative investments have existed in 401(k) plans for years, but a majority of plans do not offer them, as most stick to traditional equities and bonds.

According to the 2025 PLANSPONSOR DC Plan Benchmarking Report, in 2024, 3.9% of plans offered alternative investments, such as private equity, up from 2.2% a year prior.

The American Retirement Association stated that since companies are remaining private for longer and digital assets continue to develop, it is “increasingly important for retirement plan fiduciaries to have the flexibility to consider a range of asset classes to meet participants’ needs.”

Private investments tend to have less liquidity, are not priced daily—as public equities and bonds are—and have higher fees, often dissuading administrators from including them in their plans.

Proponents of alternative investments in retirement plans say the concerns are overblown and insist the investments will mostly exist in target-date funds or managed accounts that will allocate about 10% to 20% to alternatives. Some argue that the limited exposure would not generate sufficient returns to offset the cost of fees, and that loss of money will likely result in litigation.

“As private assets become prevalent in 401(k)s, plan sponsors face increased administrative burdens. They will need to focus on educating plan participants about private assets, while also having a clear understanding of the higher fee structures associated with private markets and managing those costs appropriately,” said Richard Clarke, chief insurance officer at Colonial Surety, in a statement. “In addition, they will need to navigate a market with loose regulations and reporting obligations, leading to reduced transparency.”

Asset Managers Hope to Finally Reach 401(k)s

Alternative asset managers have made clear their desire to have the investments offered more broadly in defined contribution plans. Pension funds and endowments tend to have larger stakes in the investments, but gains have slowed since interest rates have risen and exits have slowed.

Some recordkeepers and asset managers have announced products that include alternative investments in the lead-up to the executive order, such as Empower, Apollo, Franklin Templeton and Goldman Sachs.

Empower, which made its announcement in May, exchanged a series of letters with Senator Elizabeth Warren, D-Massachusetts, who criticized the firm’s decision to add private investments to workers retirement plans.

“This is a pivotal moment in the evolution of retirement planning,” said Edmund F. Murphy, president and CEO of Empower, in a statement after Trump’s order. “By opening the door to additional types of assets, we can offer everyday savers access to the same opportunities that have historically powered institutional portfolios.”

As an example of performance, one recent fund launched in February—the SPDR SSGA IG Public & Private Credit ETF—is an actively managed fund focused on public and private investment-grade credit. It includes private credit instruments sourced by Apollo Global Securities LLC, which may account for anywhere from 10% to 35% of the portfolio at any time, according to fund disclosures. PRIV carries a gross expense ratio of 0.70%.

While ETFs are generally more tax-efficient than mutual funds, they remain rarely utilized in 401(k) plans. The fund’s liquidity profile—particularly given its private credit exposure—raises important considerations for both individual investors and retirement plan sponsors.

The executive order is another victory for cryptocurrency, which has scored major gains since Trump took office. Trump and his family have taken a personal stake in the digital currency. The DOL reset its stance to “neutral” on crypto investments in 401(k) plans in May. Last month, Trump signed the GENIUS Act into law during what he termed “Crypto Week.”

Coinbase, the largest publicly traded crypto exchange, was up more than 4% on Thursday, before closing up 2.38%. Bitcoin’s value rose nearly 2% on Thursday, and Ether rose nearly 5%.

“This moment presents an opportunity for 401(k) plan sponsors to engage in thoughtful dialogue with digital asset investment experts around appropriate exposure levels and product innovation, ensuring this asset class is introduced to retirement strategies in a prudent and constructive way,” Gerry O’Shea, head of global market insights at Hashdex, which offers crypto index ETFs, said in a statement.