Key Takeaways
- • The Labor Department proposed a rule on Monday (March 30, 2026) that would make it easier for 401(k) plan sponsors to include alternative investments such as private equity, private credit, real estate and cryptocurrency, according to The New York Times.
- • The proposal responds to goals President Trump set out in an executive order last summer: easing the regulatory burden on plan sponsors and reducing their litigation risk.
- • Private credit, a lending market run by alternative asset managers that has recently shown signs of strain, is among the holdings the rule could draw from the trillions of dollars currently in stock and bond funds.
- • Deputy Labor Secretary Keith Sonderling said the proposal is "decidedly neutral" and does not rank any asset class above another, as ERISA requires.
Summary
The Trump administration is moving to allow working Americans to hold alternative investments in their 401(k) retirement plans, including private equity, private credit, real estate and cryptocurrency. The Labor Department, which oversees workplace retirement plans, proposed the rule on Monday. According to The New York Times, the proposal would make it easier for plan sponsors to incorporate these assets while reducing their regulatory burden and exposure to lawsuits. President Trump outlined those twin goals in an executive order last summer.
The New York Times notes that these investments were not explicitly prohibited from workplace retirement plans, but few employees have seen them on their investment menus. The first Trump administration effectively signaled openness to private equity in 2020 with guidance that was later clarified by the Biden administration, which took a more cautious stance toward alternative investments.
The rule could redirect some of the trillions of dollars currently held in stock and bond funds toward more opaque and higher-risk holdings. The Times highlights private credit in particular, a market for lending by alternative asset managers that has recently shown signs of strain.
Deputy Labor Secretary Keith Sonderling said in a statement that "managers must evaluate any and all potential product offerings by following a prudent process." He added that the proposal "is decidedly neutral and refrains from saying that any asset class is any better or worse than other investment types, as the law requires."
Plan fiduciaries, meaning the employers or administrators overseeing these plans, remain bound by ERISA, which requires them to act solely in the best interests of employees, including selecting prudent investment options. The Times' preview of the article did not include further details on the proposal's specific provisions or comment periods.
The New York Times notes that these investments were not explicitly prohibited from workplace retirement plans, but few employees have seen them on their investment menus. The first Trump administration effectively signaled openness to private equity in 2020 with guidance that was later clarified by the Biden administration, which took a more cautious stance toward alternative investments.
The rule could redirect some of the trillions of dollars currently held in stock and bond funds toward more opaque and higher-risk holdings. The Times highlights private credit in particular, a market for lending by alternative asset managers that has recently shown signs of strain.
Deputy Labor Secretary Keith Sonderling said in a statement that "managers must evaluate any and all potential product offerings by following a prudent process." He added that the proposal "is decidedly neutral and refrains from saying that any asset class is any better or worse than other investment types, as the law requires."
Plan fiduciaries, meaning the employers or administrators overseeing these plans, remain bound by ERISA, which requires them to act solely in the best interests of employees, including selecting prudent investment options. The Times' preview of the article did not include further details on the proposal's specific provisions or comment periods.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.