On August 7, 2025, the White House issued an executive order aimed at democratizing access to alternative assets for 401(k) investors. The order acknowledges that while many wealthy Americans can invest in various alternative assets, the majority of participants in employer-sponsored retirement plans have been excluded from these opportunities, which are crucial for portfolio diversification and competitive returns. The administration’s goal is to reduce regulatory burdens and mitigate litigation risks that have historically hindered fiduciaries from providing these investment options, ensuring that all Americans can benefit from enhanced retirement savings strategies.

The executive order directs the Secretary of Labor to reexamine existing guidance regarding fiduciary duties under the Employee Retirement Income Security Act (ERISA) and to consider clarifying the rules that govern the inclusion of alternative assets in retirement plans. This includes reviewing the Department of Labor’s previous statements that may have limited the ability of plan fiduciaries to offer alternative investment options. The Secretary is tasked with proposing appropriate regulations and safe harbors to facilitate the inclusion of alternative assets, thus enhancing the potential for higher long-term returns and broader investment diversification for participants.

Additionally, the order emphasizes collaboration between federal agencies, including the Securities and Exchange Commission (SEC), to support the implementation of these policy objectives. The SEC is encouraged to explore ways to facilitate access to alternative investments for individuals in defined-contribution plans, potentially revising existing regulations surrounding investor qualifications. Overall, this initiative aims to empower American workers by expanding their retirement investment choices and promoting the long-term financial security of retirees.

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