U.S. President Donald Trump’s government wants to broaden the investment choices available in U.S. workplace retirement plans.
Under a new Labor Department proposal, 401(k) sponsors would have an easier path to offer cryptocurrency, private equity, private credit, real estate, and other alternative assets. Meanwhile, the proposal is part of a wider White House push to bring more of these products into retirement accounts.
The rule does not require employers to add these assets to 401(k) menus. It would, however, give plan fiduciaries a clearer path to consider them under federal retirement law.
Large asset managers support the proposal, but consumer advocates say it could bring higher fees and more risk.
New Labor Rule could broaden 401(k) investments
The Labor Department released the proposal on Monday as part of the administration’s effort to reduce limits on nontraditional investments in retirement plans. The agency said the rule would create a “process-based safe harbor” for plan fiduciaries that follow a set of review standards before selecting investment options.
Under the proposal, plan sponsors would need to assess six factors when reviewing an asset. These include performance, fees, complexity, liquidity, valuation, and fit within a retirement plan. The department said fiduciaries must still act under ERISA rules, which require them to serve the best interests of plan participants.
Deputy Labor Secretary Keith Sonderling said the proposal does not favor one asset class over another.
”Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process,” he said.
He also said the proposal does not favor one type of investment over another.
The proposal follows an executive order President Trump signed in August 2025 to widen access to crypto, private equity, and other alternative assets in 401(k) plans. The White House completed its review of the rule in March 2026, moving it further through the federal process.
The administration said the change would reduce regulatory pressure on plan sponsors that want to consider a wider set of products.
That point matters because many employers have avoided these assets due to the risk of lawsuits and the strict duties tied to retirement plan oversight.
Crypto, private assets eye 401(k) funds
Alternative assets have not been fully banned from 401(k) plans, but access has remained limited. At first the Trump administration gave private equity some room in 2020 through guidance that opened the door to its use inside diversified retirement products.
The Biden administration later took a more cautious line and warned fiduciaries to use extra care.
The new proposal may revive industry efforts to place these assets inside target-date funds and other diversified products rather than offer them as stand-alone choices.
That approach could allow employers to add small allocations to private equity, private credit, real estate, or crypto while keeping the core structure of a retirement fund intact.
Several firms have already started building products around that model. State Street Global Advisors introduced a target-date vehicle that combines index-based investments with an alternatives sleeve managed by Apollo. BlackRock is also working with Great Gray on a target-date fund that includes private equity and private credit.
Crypto could also become part of that mix if fiduciaries decide it meets the review standards laid out in the proposal. That would mark a shift for 401(k) plans, which have mostly focused on mutual funds, public stocks, bonds, and money market products.
The 401(k) market holds a large share of U.S. retirement savings. Estimates vary, but workplace defined contribution plans control trillions of dollars. Industry groups have long argued that retirement savers should have access to a broader range of assets, especially as fewer companies stay listed on public stock exchanges.
Supporters of the rule say private markets now play a larger role in the economy than they did in past decades. They argue that workers should not be locked out of those opportunities while pension funds, endowments, and wealthy investors already use them.
Critics warn about fees, valuation, liquidity, investor understanding
Critics say the plan would bring more complex assets into retirement accounts. They argue these products can be harder to price, harder to sell, and more expensive than traditional funds.
Private credit has come under added focus as the market has grown fast in recent years. Blackstone, Apollo Global Management, and Blue Owl Capital have all expanded in direct lending. Rising loan losses have also raised questions about how these assets may perform in weaker credit conditions.
Private equity also remains controversial in retirement settings. These funds often charge higher fees and hold investments for long periods. Because the underlying companies are not publicly traded, investors may have less timely information about value and risk.
Dennis Kelleher, chief executive of Better Markets, criticized the proposal in strong terms.
”The legal immunity created by this safe harbor will incentivize financial advisers to pitch these toxic products,” adding that they could become “ticking time bombs in tens of millions of retirement accounts,” Kelleher said
Alicia Munnell, a senior adviser at the Center for Retirement Research at Boston College, also questioned the case for private equity in workplace plans.
”As far as I can see, the only party pushing for private equity in 401(k) plans is the private-equity industry,” Munnell noted.
She added that past research did not show better returns or lower volatility from adding private equity to public retirement portfolios.
Bonnie Treichel, a partner at Endeavor Law who advises plan sponsors, said the rule does not remove the need for careful review. She said,”It does not excuse fiduciaries from analysis.” She added that the proposal gives sponsors a road map for the type of review that ERISA already requires.
Wall Street pushes into 401(k)s
The proposal arrives after years of lobbying by private asset managers seeking access to retirement savings. The private asset industry has targeted the large pool of money held in 401(k) plans, which make up a major share of total U.S. retirement assets.
Stock funds remain the most common holding in workplace plans, followed by hybrid funds such as target-date products. Because target-date funds already blend different investments in one vehicle, they may become the main entry point for alternative assets if the rule moves forward.
The Labor Department has opened a 60-day comment period that ends on June 1. After that, the agency will review responses from employers, asset managers, lawyers, worker advocates, and other groups. Officials say they want to complete the rule before the end of 2026.