Executive Order 14330, signed on August 7, 2025, directs the Department of Labor and the Securities and Exchange Commission to remove the regulatory obstacles that have kept most 401(k) plans from offering alternative investments such as private equity, real estate, digital assets, commodities, infrastructure, and lifetime income products. It does not require any employer to add these options, and nothing about your 401(k) changes the day the order is signed. What changes is the federal government’s posture toward plan sponsors who want to offer them.1The White House. Democratizing Access to Alternative Assets for 401(K) Investors
What the Order Does and Doesn’t Do
The order sets a national policy that “every American preparing for retirement should have access to funds that include investments in alternative assets” when a plan’s fiduciary decides those investments offer a reasonable opportunity to improve risk-adjusted returns.1The White House. Democratizing Access to Alternative Assets for 401(K) Investors It identifies three barriers it wants dismantled: “stifling Department of Labor guidance,” “regulatory overreach,” and “burdensome lawsuits” brought by plaintiffs’ attorneys challenging fiduciary decisions.
To act on that policy, the order gives the Secretary of Labor 180 days from August 7, 2025 to reexamine past guidance and propose new rules or safe harbors, and it instructs the SEC to consider changes to securities rules that currently keep most retail investors out of private funds. There is no mandate on employers, no automatic change to plan menus, and no new right for participants to demand these investments.
Which Investments Are Now on the Table
The order defines “alternative assets” broadly, covering six categories that sit outside the traditional 401(k) mix of publicly traded stocks, bonds, and cash:
- Private market investments, including equity or debt stakes in companies not listed on public exchanges
- Real estate, including direct property interests and real-estate-backed debt
- Digital assets held through actively managed vehicles that invest in cryptocurrencies
- Commodities such as gold or oil, held directly or indirectly
- Infrastructure projects financing roads, bridges, or energy facilities
- Lifetime income strategies, including longevity risk-sharing pools designed to keep retirees from outliving their savings
The order envisions these appearing inside asset allocation funds that blend a modest alternative sleeve with traditional holdings, not as standalone menu items participants pick directly.1The White House. Democratizing Access to Alternative Assets for 401(K) Investors
Why Your 401(k) Probably Doesn’t Offer These Yet
ERISA requires every plan fiduciary to act solely in the interest of participants, invest with the care and skill of a prudent professional, diversify holdings to minimize the risk of large losses, and follow the plan’s governing documents.2Office of the Law Revision Counsel. 29 USC 1104 – Fiduciary Duties Fiduciaries who fall short face personal liability and expensive litigation.
Alternative investments create friction with almost every one of those duties. Private equity funds charge higher fees than index funds, making prudence harder to demonstrate. Many alternatives cannot be sold on demand, which complicates diversification when a participant wants to rebalance or cash out. And the lack of transparent daily pricing makes it harder to show that fiduciaries monitored the investment with adequate care. Plan sponsors looked at that legal exposure and stayed with conventional options.
The 2021 Department of Labor supplemental statement reinforced that caution by warning that most plan fiduciaries would “not likely” be suited to evaluate private equity investments in 401(k) menus.3U.S. Department of Labor. US Department of Labor Rescinds 2021 Supplemental Statement That guidance effectively froze a modest opening created by a 2020 DOL information letter, and plan sponsors had little reason to explore alternatives after it landed.
What Has Already Happened
The Department of Labor rescinded the 2021 supplemental statement in August 2025, days after the order was signed.3U.S. Department of Labor. US Department of Labor Rescinds 2021 Supplemental Statement
On March 30, 2026, the DOL published a proposed regulation setting out the steps fiduciaries should take when considering alternative assets. Under the proposal, fiduciaries would need to analyze and document their evaluation of performance, fees, liquidity, valuation methods, performance benchmarks, and complexity. A fiduciary who follows the prescribed process would gain some protection against the fee-based lawsuits that have made employers reluctant to offer anything beyond low-cost index funds.4U.S. Department of Labor. US Department of Labor Proposes Landmark Rule to Democratize Access to Alternative Assets The rule is still in its comment period as of mid-2026, and the final version could look different.
The SEC piece is the slower half. Many private equity and hedge fund offerings are available only to accredited investors meeting specific income or net worth thresholds, or to qualified purchasers with even higher asset levels. Most 401(k) participants do not meet those criteria as individuals, and the DOL cannot override those securities registration requirements. The order asks the SEC to consider revising the accredited investor and qualified purchaser rules to accommodate 401(k) access, but as of mid-2026 the SEC has not proposed formal changes and the timeline is uncertain.
The Risks Haven’t Gone Away
The order removes regulatory discouragement. It does not remove the characteristics that made fiduciaries nervous in the first place.
Liquidity mismatch. A 401(k) plan processes contributions, loans, investment changes, and distributions daily. Private equity and real estate funds typically lock up capital for years and may only permit redemptions quarterly, sometimes with the manager’s right to delay further. If you hold illiquid alternatives and want a hardship distribution or an IRA rollover, the plan may not be able to generate cash fast enough.
Valuation opacity. Publicly traded stocks have a price every second the market is open. Private equity holdings are typically valued quarterly, often with a 30-day reporting lag. The balance you see online may reflect stale numbers, and when updated valuations arrive the plan can face “true-up” risk if participants transacted in the meantime at the wrong prices.
Higher fees. Private equity funds commonly charge around 2% of assets annually plus 20% of profits, far above the index funds that dominate most 401(k) menus. The order asks DOL to help fiduciaries weigh those costs against the prospect of better returns, but research from the Center for Retirement Research at Boston College found that pension plans investing in private equity did not achieve higher returns over the 2001–2022 period after fees, and did not meaningfully reduce portfolio volatility either.
Complexity. Private fund structures involve layers of legal entities, capital calls, and distribution waterfalls that sophisticated institutional investors already find hard to evaluate. Asking a 401(k) participant who picked a target-date fund with one checkbox during onboarding to understand the risk profile of a blended fund with a private equity sleeve is a different proposition.
What This Means for Your 401(k) Right Now
Nothing changes automatically. The order does not mandate that any employer add alternative investments, and ERISA’s fiduciary duties still apply in full.2Office of the Law Revision Counsel. 29 USC 1104 – Fiduciary Duties An employer who wants to offer alternatives still needs a fiduciary willing to run the evaluation process, a recordkeeper capable of handling illiquid assets, and a fund product built for the daily-liquidity environment of a defined contribution plan. Most small and mid-size employers are unlikely to pursue that in the near term.
Participants in large corporate plans are the likeliest to see these options first, and they will almost certainly appear inside blended target-date or balanced funds rather than as standalone picks. If your plan does add one, read the fee disclosure closely, check any restrictions on moving money out, and remember that the stated value of illiquid holdings may lag actual market conditions. The safe harbors DOL is building are designed to protect plan sponsors from litigation, not to guarantee that a given fund is right for you. Your employer’s decision to put a fund on the menu is not investment advice.