The US Department of Labor has proposed new rules that would make it easier for 401(k) plans to include alternative assets such as private credit, private equity, real estate, and cryptocurrencies, according to a report by Bloomberg.
The move, part of the Trump administration’s regulatory agenda, is aimed at reducing the risk of class-action lawsuits that have historically discouraged plan sponsors from offering alternatives. If finalised, the rule could open the $14tn defined contribution market to private-market managers including Blackstone, Apollo Global Management, and Ares Management.
Under the proposal, plan sponsors following formal procedures — assessing performance, fees, liquidity, and valuation — would gain greater protections from litigation. The guidance mirrors practices already common in state and local pension plans, where nearly all include alternative assets, compared with only 4% of defined contribution plans in 2024. Industry groups, including the Managed Funds Association and Alternative Investment Management Association (AIMA), praised the initiative, highlighting its potential to expand private-market access for ordinary retirement savers.
In a statement Jack Inglis, CEO of AIMA, said: “Professional investment managers operating under an ERISA fiduciary duty are well-positioned to evaluate and implement alternative asset allocations responsibly. Clear safe harbour guidance will finally allow them to do their jobs, in the interests of the millions of working Americans whose retirement security depends on optimal portfolio construction.”
Some retirement plan providers, like Empower, are already piloting alternatives in collaboration with firms such as Apollo and Franklin Templeton. While proponents argue the move aligns 401(k)s with modern investment opportunities, consumer advocates warn that expanding access to complex and illiquid alternatives could increase risk for employees’ retirement savings.
