The following is part of our annual publication Selected Issues for Boards of Directors in 2026. Explore all topics or download the PDF.
On August 7, 2025, the Trump administration issued an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors” (the Executive Order), marking a step toward facilitating greater inclusion of investment options with exposure to alternative assets in defined contribution plans, including 401(k) plans (collectively 401(k) plans).[1] This development is noteworthy heading into 2026 for boards of directors overseeing companies that sponsor 401(k) plans, as well as those in the asset management industry.
Link to Why this Matters Now Why this Matters Now
More than 90 million Americans participate in employer-sponsored defined contribution plans, representing over $12 trillion in investment capital. Yet unlike high-net-worth individuals and institutional investors, most 401(k) plan participants have historically been largely precluded from accessing exposure to private equity, private credit, real estate, infrastructure and digital assets.
Throughout the years, there has been a slow but steady move toward enabling 401(k) plans access to alternative assets. The recent Executive Order is reflective of a position that has been gaining momentum—without greater access to investments in alternative asset classes, 401(k) plan participants are missing out on “potential growth and diversification opportunities associated with alternative asset classes.”[2] Despite these growing sentiments, many 401(k) plan fiduciaries and sponsors have been slow to incorporate exposure to alternative assets as part of investment line-ups due to a lack of clear guidance from the Department of Labor (the DOL) and concerns about liability (e.g., from participant lawsuits alleging imprudent selection based on higher risks, lower liquidity and/or excessive fees).
Link to What the Executive Order Does What the Executive Order Does
While there has been significant media coverage of the Executive Order, it is important to keep in mind that it does not usher in any immediate regulatory changes. The Executive Order directs the DOL to reexamine its guidance regarding the investment of 401(k) plans in alternative assets and, to the extent deemed appropriate by the DOL, to issue clarifying guidance by early February 2026. The Executive Order also directs the Securities and Exchange Commission (SEC), in consultation with the DOL, to consider ways in which to facilitate the investment by 401(k) plan participants in alternative assets.
While there are quite a few outstanding questions to be addressed by the DOL and the SEC before we see significant regulatory changes in this space, there are still timely considerations to keep in mind going into 2026.
Link to What Boards Should Consider in 2026 What Boards Should Consider in 2026
Below is a high-level overview of some general considerations for 2026:
- Action by the DOL and SEC: In response to the Executive Order’s directive, the DOL may issue a notice of proposed rulemaking in the early days of 2026. Companies should be on the lookout for DOL and/or SEC rulemaking.
- Determining the Board’s Role: Consider what role (if any) the board will play in determining next steps (if any) relating to alternative assets and the 401(k) plan.
- Assessing Current Plan: Encourage management to review the current governing documents, investment policy statement and investment line-up for the company’s 401(k) plan to determine whether investment options with exposure to alternative assets are permitted and/or currently held by the plan.
- Evaluating Fiduciary Capabilities: Consider evaluating whether the 401(k) plan’s current fiduciaries (e.g., retirement committee or third-party investment advisor/manager) have the requisite expertise to select, evaluate and monitor investment options with exposure to private equity.
Link to Looking Ahead: The 2026 Landscape Looking Ahead: The 2026 Landscape
In addition to the foregoing general considerations, there are several trends that will bear watching in 2026:
- Industry Innovation: While there have been steady developments relating to increased participation by 401(k) plans in alternative asset classes, we expect to see increased partnerships between private fund sponsors, investment managers and traditional 401(k) platform providers in this space.
- Potential Safe Harbors: The DOL and SEC may memorialize and expand upon past guidance to provide conditions relating to a safe harbor for fiduciaries selecting investment options with exposure to alternative assets.
- Litigation Trends: We may also see regulations from the DOL aimed at reducing the risk of ERISA litigation relating to the selection of investment options with exposure to alternative asset classes.
Link to The Bottom Line The Bottom Line
Boards may wish to consider (and may encounter questions from participants regarding) the inclusion of alternative assets as part of the 401(k)-plan lineup. As we await further guidance, members of boards of directors should take a measured approach in response to the Executive Order: educate yourselves on the issues, monitor regulatory developments closely and assess current plan framework and fiduciary capabilities.[3]
[1] The White House, “Democratizing Access to Alternative Assets for 401(k) Investors” (August 7, 2025), available here.
[2] The Executive Order.
[3] For more detailed analysis and information, see our August alert memo available here.