Alternative Assets in 401(k)s: Big Changes Ahead?
As retirement plan rules continue to evolve, one area drawing attention is the inclusion of alternative assets in 401(k) plans.
In early August 2025, the White House released an executive order that has pushed this issue further into the spotlight.
The order calls for improved access to alternative investments in retirement plans, along with increased transparency and fiduciary protections.
But what does that mean for the average 401(k) investor?
This article breaks down some of the important facts so you can understand what’s changing and why.
What Does the 2025 Executive Order Say about Alternative Assets in 401(k)s?
On August 7, 2025, the White House issued an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors.”¹
The directive doesn’t mandate changes but instead initiates a regulatory review process designed to explore how alternative investments may be more broadly included in workplace retirement plans – especially 401(k)s.
The executive order instructs the Department of Labor (DOL) to:
- Review existing regulations, particularly around fiduciary standards.
- Evaluate whether current rules adequately support the inclusion of non-traditional investments, such as private equity, venture capital, real estate, and infrastructure.
- Examine disclosure, transparency, and fee structures tied to alternative assets.
The order requires the DOL to complete these actions within 180 days (by early February 2026).
The initiative’s stated goal is to expand retirement savings opportunities by giving Americans – including those in smaller employer-sponsored plans – more investment options.
While the order does not mandate any changes to plan offerings, it opens the door for policy updates that may impact what’s available to 401(k) participants in the coming years.
What Are Alternative Assets in a 401(k)?
Alternative assets refer to investments that fall outside traditional stocks, bonds, and cash equivalents.
In the context of 401(k)s, this typically includes:
- Private equity
- Venture capital
- Private credit
- Real estate
- Infrastructure
- Hedge funds (in some cases)
These assets are generally considered illiquid, meaning they can’t easily be bought or sold on public markets.
While no law currently prohibits plan sponsors from offering these types of investments to 401(k) investors, most have steered clear.
These assets are often seen as riskier than traditional options like publicly traded stocks and bonds.
And they also tend to come with higher fees, lower transparency, and limited liquidity, making them less accessible for everyday investors.
Why Is the Government Addressing Alternative Assets in Retirement Plans?
The executive order frames this shift as part of a broader effort to modernize retirement plans and offer workers the same diversification opportunities available to institutional investors.
According to President Trump, “the order seeks to relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement.”²
While many defined benefit plans already invest in private equity and other alternative assets, defined contribution plans like 401(k)s have traditionally avoided them due to regulatory complexity and fiduciary concerns.
The executive order suggests this has created an imbalance – a wealth gap – where employees at larger institutions enjoy access to broader investment options, while workers in smaller plans do not.
The review aims to evaluate whether improving access to alternative assets could help close this gap and enhance retirement readiness for all workers.
What Should 401(k) Investors Do Next?
As the Department of Labor reviews current retirement plan rules, the future of alternative assets in 401(k) plans remains in flux.
While no immediate changes have taken place, ongoing conversations may eventually expand the types of investments available to retirement savers.
For now, if you want to make sure your current 401(k) strategy aligns with your goals, risk tolerance, and time horizon, it may be time to get a professional second opinion.
At 401(k) Maneuver, we provide independent, third-party account management designed to help you grow and protect your retirement savings – no matter how the market or policy landscape evolves.
Have questions about rolling over your 401(k)? Book a complimentary 15-minute 401(k) Strategy Session with one of our advisors.
Sources:
- https://www.whitehouse.gov/presidential-actions/2025/08/democratizing-access-to-alternative-assets-for-401k-investors/
- https://www.investopedia.com/trump-to-sign-executive-order-that-clears-path-for-alternative-assets-in-401-k-s-11786947
