In August 2025, President Donald Trump signed an executive order (EO) directing various federal agencies to review and revise guidance within 180 days to facilitate access to alternative investments — such as private equity, cryptocurrency and other nontraditional assets — in participant-directed defined contribution (DC) retirement plans. A related White House fact sheet and Department of Labor (DOL) statement were also released. The EO follows DOL action in May of this year rescinding guidance that discouraged fiduciaries from including cryptocurrency options in DC plans.
In 2020, the Trump administration’s DOL issued an information letter addressing the use of alternative investments that provided a framework for fiduciaries to include private equity in asset allocation funds within DC plans. However, a December 21, 2021 supplement released by the Biden administration’s DOL stated that the 2020 information letter was not an endorsement of the use of private equity in DC plans but rather guidance focused on larger plan fiduciaries with existing experience managing private equity in defined benefit (DB) plans.
In light of the regulatory uncertainty and litigation concerns surrounding alternative investments, President Trump issued the EO to direct federal agencies to reexamine existing regulatory guidance that has limited DC plan participants, including participants in 401(k) plans, from investing in alternative assets that are utilized by DB plans. Such future guidance must aim to identify the criteria that fiduciaries should use to prudently balance potentially higher expenses against the objectives of seeking greater long-term net returns and broader diversification of investments.
The EO defines “alternative assets” broadly to include:
To implement this policy, the EO provides the following directives:
Despite the potential benefits of alternative assets (e.g., potential for increased returns), including alternative assets in DC plans presents complex issues for plan fiduciaries. The alternative investment options may include higher fees, less liquidity, less disclosure and different risks than publicly traded investments. In addition, some alternatives (e.g., digital assets) pose unique challenges related to custody and cybersecurity that will need to be addressed.
Plan fiduciaries should continue to monitor the developments in the alternative asset allocation space, including future guidance, and consider the plan and participant information that may help assess the role of alternative investments.
