President Donald J. Trump has issued an executive order aiming to expand access for American workers in 401(k) and other defined-contribution retirement plans to alternative asset investments. The order, signed on August 7, 2025, states that many wealthy Americans and public pension participants can already invest in a variety of alternative assets, but most individual retirement plan holders cannot.
According to the order, over 90 million Americans participate in employer-sponsored defined-contribution plans. The President’s directive points out that while fiduciaries of these plans must vet private offerings carefully to protect investors, current regulations and litigation risks have limited opportunities for diversification into alternative assets.
The President stated: “By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered: ... My Administration will relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement.”
The policy outlined in the order emphasizes: “It is the policy of the United States that every American preparing for retirement should have access to funds that include investments in alternative assets when the relevant plan fiduciary determines that such access provides an appropriate opportunity for plan participants and beneficiaries to enhance the net risk-adjusted returns on their retirement assets.”
The order defines "alternative assets" broadly. These include private market investments not traded on public exchanges, real estate interests (including related debt instruments), digital asset investment vehicles, commodities, infrastructure development projects, and lifetime income investment strategies such as longevity risk-sharing pools.
Within 180 days of this executive action, the Secretary of Labor is directed to reexamine Department of Labor guidance regarding fiduciary duties under ERISA with respect to including alternative assets in retirement plans. This review may involve considering whether to rescind previous statements such as the December 21, 2021 Supplemental Private Equity Statement. The Secretary is also tasked with proposing new rules or clarifications about fiduciary responsibilities concerning these types of investments. The goal is to identify prudent criteria for balancing potential expenses against objectives like higher long-term returns and broader diversification.
The Secretary will consult with other federal regulators—including the Treasury Department and Securities and Exchange Commission (SEC)—to align parallel regulatory efforts. The SEC is also asked to consider changes regarding accredited investor status or qualified purchaser definitions that could help facilitate access for defined-contribution plan participants.
The executive order specifies it does not affect existing legal authorities or budgetary functions nor create any enforceable rights or benefits against government entities or employees.
“During my first term, my Administration issued a 2020 information letter, recognizing that prudent Federal action could encourage the proliferation of investment strategies under which a portion of retirement plan participants’ interests are allocated to alternative assets, as is the case for institutional investors,” Trump said.
He added: “A combination of regulatory overreach and encouragement of lawsuits filed by opportunistic trial lawyers has stifled investment innovation and largely relegated 401(k) and other defined-contribution retirement plan participants to asset classes whose returns lack the very same long-term net benefits allowed for and achieved by public pension plans and other institutional investors.”
This move follows recent trends among institutional investors who increasingly allocate portfolio segments toward alternatives such as private equity or real estate—investments often seen as offering potential higher returns along with diversification opportunities compared with traditional stocks or bonds.
