Key Takeaways
- • The U.S. Labor Department published a proposed rule on April 7, 2026, enabling 401(k) retirement plan trustees to include alternative assets including cryptocurrencies, private credit, and real estate, responding to a Trump executive order from August 2025.
- • The proposal creates a "safe harbor" provision that shields employers and plan administrators from fiduciary liability when workers invest in alternative assets, provided trustees conduct documented due diligence on performance, fees, liquidity, valuation, benchmarks, and complexity.
- • The rule targets the $12 trillion in American 401(k) assets and addresses the three-decade decline in publicly traded companies by expanding access to alternative investments that proponents argue improve portfolio diversification and growth potential.
- • Labor Secretary Lori Chavez characterized the proposal as a "major win for American workers, retirees, and their families," while the SEC, under Chair Paul Atkins, collaborated on the framework for self-directed retirement plans.
- • The safe harbor framework introduces a six-point evaluation template for fiduciaries, designed to reduce litigation risk that has historically prevented widespread alternative asset adoption in retirement accounts.
Summary
The Trump administration has advanced a regulatory framework to fundamentally reshape retirement account investment options. On April 7, 2026, the U.S. Department of Labor published a proposed rule making it substantially easier for 401(k) plan trustees to offer alternative assets—including cryptocurrencies, private credit, real estate, and other non-traditional investments—to American workers.
The proposal was developed in direct response to an executive order Trump issued in August 2025 directing federal agencies to reevaluate existing guidance that restricted alternative assets in 401(k) plans governed by the Employee Retirement Income Security Act of 1974. The SEC was similarly directed to address restrictions in self-directed retirement accounts. SEC Chair Paul Atkins confirmed the regulator's collaboration on the proposal, signaling coordinated action across financial regulators.
The centerpiece of the framework is a safe harbor provision designed to reduce fiduciary liability. Because employers and plan administrators are legally obligated to act in workers' financial interest, litigation risk has historically deterred 401(k) providers from offering alternative investments. The new safe harbor permits fiduciaries to include alternative assets if they conduct thorough due diligence using a structured six-point evaluation template: performance metrics, performance benchmarks, fee analysis, liquidity assessment, valuation methodology, and complexity evaluation. Labor Department officials emphasized on a March 30 media call that the rule does not mandate alternative asset inclusion but instead provides fiduciaries with "the toolkit" to analyze such investments objectively.
The scale of potential impact is substantial. American workers currently hold more than $12 trillion in 401(k) assets. Proponents argue that expanded alternative asset access addresses a structural shift in capital markets: the number of publicly traded companies has declined approximately 3,000 over the past three decades, constraining traditional diversification options. Labor Secretary Lori Chavez stated the rule "will show how plans can consider products that better reflect the investment landscape as it exists today" and will "drive innovation and result in a major win for American workers, retirees, and their families."
The proposal was developed in direct response to an executive order Trump issued in August 2025 directing federal agencies to reevaluate existing guidance that restricted alternative assets in 401(k) plans governed by the Employee Retirement Income Security Act of 1974. The SEC was similarly directed to address restrictions in self-directed retirement accounts. SEC Chair Paul Atkins confirmed the regulator's collaboration on the proposal, signaling coordinated action across financial regulators.
The centerpiece of the framework is a safe harbor provision designed to reduce fiduciary liability. Because employers and plan administrators are legally obligated to act in workers' financial interest, litigation risk has historically deterred 401(k) providers from offering alternative investments. The new safe harbor permits fiduciaries to include alternative assets if they conduct thorough due diligence using a structured six-point evaluation template: performance metrics, performance benchmarks, fee analysis, liquidity assessment, valuation methodology, and complexity evaluation. Labor Department officials emphasized on a March 30 media call that the rule does not mandate alternative asset inclusion but instead provides fiduciaries with "the toolkit" to analyze such investments objectively.
The scale of potential impact is substantial. American workers currently hold more than $12 trillion in 401(k) assets. Proponents argue that expanded alternative asset access addresses a structural shift in capital markets: the number of publicly traded companies has declined approximately 3,000 over the past three decades, constraining traditional diversification options. Labor Secretary Lori Chavez stated the rule "will show how plans can consider products that better reflect the investment landscape as it exists today" and will "drive innovation and result in a major win for American workers, retirees, and their families."
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