U.S. President Donald Trump is expected to sign an executive order Thursday that directs the Labor Department to review guidance and consider rule changes allowing private equity, real estate, cryptocurrency and other alternative assets to be offered within 401(k) retirement plans. The decision, reported by Bloomberg News and later confirmed by White House aides, represents a significant shift in U.S. retirement policy.
The order tasks the Labor Department with clarifying fiduciary responsibilities associated with alternative asset allocation and assessing whether current regulations under the Employee Retirement Income Security Act of 1974 need revision. Proponents argue the move will open the $12 trillion defined contribution market to new investment opportunities and enhance diversification options for plan participants.
Critics, however, warn that adding high-volatility and illiquid assets such as cryptocurrencies to retirement portfolios could expose savers to undue risk and complicate plan administration. Industry groups representing large alternative asset managers, including Blackstone, KKR and Apollo Global Management, have lobbied for expanded access, emphasizing the potential for higher long-term returns.
The order also directs coordination between the Labor Department, Treasury Department and Securities and Exchange Commission to identify necessary regulatory adjustments. If implemented, the change could pave the way for asset managers to develop new target-date and balanced funds incorporating alternative holdings.
While the executive order does not immediately alter 401(k) plan menus, it signals a broader effort by the administration to integrate digital and alternative assets into mainstream financial products. Observers will be watching for subsequent rulemakings and industry responses in the coming months.
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