DOL Proposes New Rules for Alternative Assets in 401(k) Plans

The U.S. Department of Labor issued proposed new rules on Monday, March 30, clarifying how trustees can incorporate alternative assets, including private equity and cryptocurrencies, into 401(k) retirement plans.

These measures aim to reduce long-standing barriers to integrating less liquid and less transparent assets into American retirement savings.

The initiative follows an executive order from President Donald Trump last summer and could create a significant new source of capital for alternative asset management firms.

The new guidance outlines how trustees can integrate alternative assets, including private equity and cryptocurrencies, into 401(k) retirement plans, aiming to reduce long-standing barriers.

The guidance specifies how trustees can add these asset classes. Trustees are bound by a fiduciary duty under the Employee Retirement Income Security Act (ERISA) to act in the best interest of retirement plan members.

Under the proposed rule, fiduciaries must evaluate factors such as performance, fees, liquidity, and valuation when selecting alternative investments.