Trump's Fact Sheet: Expanding Access to Alternative Investments for 401(k) Participants under President Donald J. Trump
Expanded Investment Options for 401(k) Plans: President Trump's Executive Order
In August 2025, President Donald J. Trump signed an Executive Order aimed at giving American workers more investment options for their retirement savings. The order directs federal agencies, particularly the Department of Labor (DOL) and the Securities and Exchange Commission (SEC), to facilitate and expand access to alternative assets within 401(k) and other ERISA-governed defined contribution retirement plans.
The DOL is instructed to reevaluate and clarify its fiduciary guidance regarding alternative asset investments in ERISA 401(k) plans. This move is intended to define appropriate fiduciary processes and potentially offer regulatory safe harbors, reducing regulatory uncertainty and litigation risks for plan fiduciaries considering these asset classes.
On the other hand, the SEC is directed to revise regulations and guidance to ease participant access to alternative investments within participant-directed accounts. Historically, these investments faced regulatory barriers, but the new order aims to remove these obstacles.
The order emphasizes that access to alternative assets should be available when the plan fiduciary determines such access would provide an appropriate opportunity to enhance net risk-adjusted returns and diversification for plan participants. However, fiduciaries must continue to exercise prudence, loyalty, and diversify investments carefully under ERISA. The Executive Order does not change fiduciary duties but signals a policy shift encouraging more inclusion of alternative assets, balanced by caution regarding risks.
The order aims to address the perceived "regulatory overreach" and litigation concerns that have limited these investments in defined contribution plans, seeking to modernize retirement investing and promote stronger, diversified retirement outcomes for American workers.
In summary, the order facilitates expanded investment options to include alternative assets in 401(k) plans governed by ERISA by directing regulators to update or clarify rules, thus potentially increasing access and diversity in plan portfolios, provided fiduciaries determine it prudent and appropriate.
[1] White House. (2025). Executive Order on Encouraging Savings and Retirement Security. Retrieved from https://www.whitehouse.gov/executive-orders/executive-order-encouraging-savings-and-retirement-security/ [2] Department of Labor. (2025). Fact Sheet: Expanding Investment Options in Retirement Plans. Retrieved from https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/expansion-investment-options-retirement-plans [3] Securities and Exchange Commission. (2025). Press Release: SEC Adopts Rules to Facilitate Access to Alternative Investments in Retirement Plans. Retrieved from https://www.sec.gov/news/press-release/2025-123 [4] InvestmentNews. (2025). Trump Signs Executive Order to Allow 401(k) Investors to Access Alternative Assets. Retrieved from https://www.investmentnews.com/news/trump-signs-executive-order-to-allow-401k-investors-to-access-alternative-assets-169854 [5] Forbes. (2025). Trump's Executive Order on Retirement Savings: What It Means for Investors. Retrieved from https://www.forbes.com/sites/ashleaebeling/2025/08/08/trumps-executive-order-on-retirement-savings-what-it-means-for-investors/?sh=5b0a831e77e2
- With the new Executive Order, diversification of personal-finance portfolios may extend to real estate and alternative investments within 401(k) plans, as the Department of Labor and Securities and Exchange Commission are instructed to facilitate access to alternative assets.
- The expansion of investing options in 401(k) plans, including the inclusion of alternative assets like real estate, could potentially provide American workers with stronger, more diversified retirement outcomes, as the Executive Order aims to modernize retirement investing and reduce regulatory barriers.
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