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New guidelines could transform retirement planning by increasing access to alternative assets, but experts warn of increased risks and potential legal challenges.
Key Takeaways
- Trump's executive order aims to open 401(k) retirement accounts to private assets like private equity, real estate, and crypto.
- The policy could create new investment options and risks for retirement savers while expanding opportunities for asset managers.
President Donald Trump is set to issue an executive order on Thursday that would pave the way for 401(k) retirement plans to include alternative assets such as private equity, real estate, and crypto, Bloomberg reported today, citing a person with knowledge of the plans.
The order will instruct the Department of Labor to reevaluate existing guidance that has long discouraged the inclusion of illiquid or complex assets in retirement plans governed by the Employee Retirement Income Security Act of 1974 (ERISA).
Labor officials will also be directed to clarify fiduciary responsibilities for plan sponsors offering asset allocation funds with exposure to alternatives.
Trump will further direct Labor Secretary Lori Chavez-DeRemer to coordinate with the Treasury Department, Securities and Exchange Commission, and other federal agencies on potential rule changes that would expand access to alternatives to participant-directed retirement plans.
The SEC is expected to play a key role in enabling these products to enter the 401(k) landscape.
The goal of Trump’s executive order is to ease restrictions that have historically kept alternative assets like private equity, real estate, and cryptocurrency out of 401(k) retirement plans.
This is a developing story.
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