Expanding Investment Opportunities for 401(k) Holders by Making Alternative Assets More Accessible

Expanding Investment Opportunities for 401(k) Holders by Making Alternative Assets More Accessible

On August 7, 2025, an executive order titled "Democratizing Access to Alternative Investments for America’s Workers" was signed, aiming to expand investment opportunities in alternative assets for 401(k) and other defined contribution retirement plans governed by ERISA.

The policy seeks to address existing regulatory burdens and litigation risks that have historically limited access to alternative asset classes for ordinary retirement plan participants. The key challenges targeted include fiduciary liability concerns, regulatory complexity and uncertainty, and high costs and complexity involved in managing alternative assets within retirement plans.

To counter these issues, the executive order calls for clarified guidance from the Department of Labor (DOL) within 180 days on fiduciary duties when including alternative assets, potentially with new safe harbor provisions. The Securities and Exchange Commission (SEC) is tasked with revising regulations, including accredited investor rules, to facilitate access to alternative investments in participant-directed retirement accounts.

The policy also emphasises the importance of enhanced coordination among federal regulators to foster financial inclusion and retirement security through broader access to diversified, higher-yield investment opportunities. The order encourages the development of safe harbor provisions and transparent fee structures to reduce litigation risk and support fiduciaries with frameworks for continuous due diligence and documentation.

The executive order explicitly states the principle that every American preparing for retirement should have access to alternative assets when fiduciaries deem such investments appropriate, given their potential to enhance net risk-adjusted returns and diversification benefits.

The order is to be implemented consistent with applicable law and subject to the availability of appropriations. The costs for publication of this order will be borne by the Department of Labor. The Secretary of Labor will consider whether to rescind the December 21, 2021, Supplemental Private Equity Statement.

[1] White House, "Executive Order on Encouraging Investments in American Infrastructure," August 7, 2025. [2] Department of Labor, "Fact Sheet: Expanding Access to Alternative Investments in Retirement Plans," August 7, 2025. [3] Securities and Exchange Commission, "Statement on Expanding Access to Alternative Investments in Retirement Plans," August 7, 2025. [4] Department of the Treasury, "Statement on Encouraging Investments in Alternative Assets for Retirement Plans," August 7, 2025. [5] Office of Management and Budget, "Memorandum on Implementation of Executive Order on Encouraging Investments in American Infrastructure," August 7, 2025.

1. The executive order, signed on August 7, 2025, encourages the Securities and Exchange Commission (SEC) to revise regulations, specifically accredited investor rules, to facilitate access to alternative investments in participant-directed retirement accounts, which falls under the realm of personal-finance and investing in the technology-driven financial sector.
2. The policy emphasizes the importance of these revisions, as they aim to lower the regulatory complexity and uncertainty associated with real estate and other alternative asset classes, thereby expanding investment opportunities in such assets for 401(k) and other defined contribution retirement plans, ultimately enhancing America's financial landscape.

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