On August 7, 2025, President Trump signed an Executive Order (the “Order”) directing the Department of Labor (“DOL”) to re-examine guidance on a fiduciary’s duties under ERISA regarding alternative asset investments in 401(k) and other defined contribution plans, and potentially issue one or more fiduciary safe harbors. Alternative assets generally include private equity, real estate, commodities and digital assets. The Order directs the DOL to take the above actions within 180 days. The Order also directs the Securities and Exchange Commission to facilitate access to alternative assets for participant-directed defined contribution retirement savings plans, including revisiting “accredited investor” and “qualified purchaser” rules.
Consistent with the Order, on August 12, 2025, the DOL rescinded its December 12, 2021 guidance that discouraged fiduciaries from considering alternative assets for 401(k) plan investment menus.
Given the need for regulatory guidance and the current 401(k) litigation environment, we expect that plan fiduciaries will generally take a wait and see approach to alternative investments. The momentum, for now, indicates that 401(k) investment menus will likely at some point include options (e.g., collective investment trusts, actively managed funds and target date funds) that incorporate alternative investments. We will monitor the regulatory guidance as it is issued.