How a New DOL Proposal Could Expand Access to Alternative Assets in 401(k)s  

The Department of Labor has proposed a new rule that would provide guidance for 401(k)s to allow alternative assets in their plans. This proposal follows an executive order from the Trump Administration encouraging fiduciaries to expand access to these types of assets, including, real estate, private equity, and cryptocurrency.

While these investments are not prohibited in 401(k)s, many plan sponsors do not offer them due to litigation risks and uncertainty.

What is in the Proposed Rule?

The proposed regulation is designed to reduce regulatory burden and litigation risk that may limit plan fiduciaries’ ability to or discourage them from including alternative assets in 401(k) plans.

Rather than outline which types of alternative assets can be included in 401(k) plans, this proposed rule provides guidelines fiduciaries can follow in order to decide for themselves which assets are included. This is not about what can be allowed, but what process must be followed to allow it.

The evaluations factors noted by the Department of Labor are:

• Performance
• Fees and expenses
• Liquidity
• Valuation
• Benchmarks
• Complexity

These factors are intended to help fiduciaries assess whether a given investment is appropriate within the context of the overall plan, taking into account both the potential benefits and the operational considerations involved.

The emphasis being about how the decisions are made and not about the potential performance of any assets aligns the new guidelines to ERISA’s existing fiduciary standards. This alignment may help reduce ambiguity for fiduciaries by reinforcing that a prudent process, rather than predicting outcomes, is the primary standard for compliance.

The public comment period ends on June 1, 2026.

What does this mean for retirement investors?

Because there is no requirement on which types of alternative assets fiduciaries include, or even a requirement that employers provide a 401(k) plan, exposure to these assets may be limited depending on how individual plan sponsors interpret the guidance and determine what fits within their plan’s objectives and participant needs.

For example, investors may be able to hold real estate, but not cryptocurrency.

Investors may also not be able to participate in these assets as direct investment options because their plan may only permit exposure to alternative assets if they are packaged within target-date funds or other diversified vehicles.

Different providers and plans may also have different levels of availability for alternative investing. As a result, two investors with similar goals may have very different levels of access to alternative assets depending on their employer’s plan design.

Additionally, access to alternative investments in employer-sponsored 401(k)s will likely also be a gradual shift rather than an immediate change as plan sponsors may take time to evaluate how alternative assets fit within their existing investment lineup, operational capabilities, and fiduciary responsibilities.

Ways to Invest in Alternative Assets Right Now

While access to alternative assets within employer-sponsored 401(k) plans may evolve over time, investors can start exploring other retirement account options that offer broader investment flexibility and more immediate access.

Self-directed IRAs are not tied to a specific employer plan and may allow investors to allocate retirement funds into a wider range of asset types, including real estate, private equity, and other alternatives.

Even for those who participate in an employer-sponsored 401(k), a self-directed account may serve as a complementary approach for investors looking to diversify beyond the investment options available in their workplace plan.

Exploring Your Next Steps

The Department of Labor’s proposed rule signals a potential shift in how alternative assets are considered within 401(k) plans, placing greater emphasis on the fiduciary process rather than limiting specific investment types. While this may create new opportunities over time, access will likely depend on how individual plan sponsors interpret and implement the guidance.

Over 350,000 investors use Equity Trust to make alternative assets part of their retirement strategy. Contact an IRA specialist to start your options today.

Equity Trust Company is a directed custodian and does not provide tax, legal, or investment advice. Any information communicated by Equity Trust Company is for educational purposes only, and should not be construed as tax, legal or investment advice. Whenever making an investment decision, please consult with your tax attorney or financial professional.