DOL Proposes Rule for Alternatives in 401(k) Plans

The U.S. Department of Labor has proposed a new rule that would enable 401(k) retirement plans to include alternative investments such as private equity, private credit and cryptocurrencies, marking a potential shift in how Americans manage their nest eggs. The framework, announced last week, responds to an August 2025 executive order from President Donald Trump directing federal agencies to expand access to these assets beyond traditional stocks and bonds.

The proposal establishes a six-point evaluation template for plan fiduciaries, who are legally obligated to act in participants' best interests. It covers factors like performance benchmarks, fees, liquidity, valuation and complexity. Officials emphasized that the rule does not mandate or endorse any specific investments but provides a "safe harbor" provision to shield employers and administrators from lawsuits if losses occur after following the process. "We are not telling any fiduciary out there to invest in private credit or not to invest in private credit. We just give responsible fiduciaries the toolkit so that they can analyze in an objective way," a Labor Department official said during a media briefing.