The Trump administration on Monday proposed a new rule. It could make it easier for 401(k) retirement plans to include private assets such as private equity, real estate, private credit, and cryptocurrency.
The proposal from the U.S. Department of Labor is designed to reduce barriers. These barriers have long limited access to alternative investments in workplace retirement plans. The move follows an executive order signed by President Donald Trump in August 2025. The order directed federal agencies to expand access to these types of assets.
Labor Secretary Lori Chavez-DeRemer said the rule would help retirement plans consider more modern investment options. She said these options better reflect today’s financial landscape. She added that the goal is to strengthen retirement outcomes. It also aims to give Americans more ways to grow their savings.
Federal law requires those managing 401(k) plans to act in the best interests of participants. This standard has made many employers cautious. They worry about offering complex or higher-fee investments. The risk of lawsuits has also been a major concern.
The proposed rule aims to provide clearer guidance. Plan trustees would need to review key factors before adding alternative assets. These include performance, fees, liquidity, valuation, benchmarks, and overall complexity. Officials said the government is not directing investment decisions. Instead, it is outlining a process that is thorough and objective.
The rule also introduces “safe harbor” protections for fiduciaries who follow the process. It does not eliminate the risk of lawsuits. However, it is meant to reduce legal uncertainty. That uncertainty has discouraged many plan providers from offering alternative investments.
Supporters say the change could improve diversification. They also believe it could boost long-term returns for retirement savers. The 401(k) market holds more than $14 trillion in assets. This makes it a major opportunity for asset managers.
Major firms including Blackstone, KKR, Apollo Global Management, and BlackRock have supported broader access to these investments. Apollo CEO Marc Rowan said the difference between public and private assets is largely about liquidity. He said it is not about whether they are safe or risky. He also said broader access could lead to stronger retirement outcomes over time.
Treasury Secretary Scott Bessent called the proposal an initial step. He said it must remain focused on protecting retirement savings. Paul Atkins, chair of the Securities and Exchange Commission, also supported the effort. He said Americans should have greater access to diversified long-term investments tied to economic growth.
Critics warn that the risks are significant. They say many retirement savers may not fully understand complex products. These investments can carry higher fees and limited liquidity. They may also lack transparency compared to traditional assets. Elizabeth Warren (D-MA) criticized the proposal. She said it could expose retirement accounts to risky assets. She also pointed to signs of strain in parts of the private market.
Even with the proposed changes, the rule would not automatically open the floodgates. Private equity and cryptocurrency would not immediately enter all retirement plans. Instead, the rule creates a framework. It allows plan managers to consider these options if they believe it is appropriate.
The Department of Labor will accept public comments for 60 days. It will then decide whether to finalize the rule.