📃August 2025 – Washington, D.C.
President Donald Trump is poised to sign a landmark executive order aimed at expanding retirement investment options by easing restrictions on 401(k) plans and other workplace retirement accounts. The move could grant everyday investors greater access to alternative assets like private equity — a space traditionally reserved for institutional and high-net-worth investors.
🔹A Push Toward Alternative #Investments
This executive order directs the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to provide guidance for employers interested in offering private equity and credit investments in their employee retirement plans.
The order is part of a broader effort to tap into the $12 trillion U.S. defined-contribution retirement market — a goal long sought by the private equity industry. Though there is no legal restriction against including private investments in 401(k) plans, most plan sponsors have avoided them due to their fiduciary obligation to offer prudent, low-cost, transparent, and liquid investment options.
Private equity and private credit funds, by contrast, have typically been less liquid, more opaque, and higher cost than traditional mutual funds or ETFs.
🔸Executive Order Is a Starting Point
While the order itself doesn’t change existing policy, it marks a significant political signal. According to Jaret Seiberg, financial policy analyst at TD Cowen, the executive order could lead to rule changes over the coming years — but likely not until 2026 or beyond.
“It’s a policy direction, not a rulebook,” Seiberg explained. “Agencies still need to write and finalize new regulations.”
🔹More Responsibility on Employers
Lisa Gomez, former Assistant Secretary of Labor for Employee Benefits Security, emphasized that the inclusion of private equity in retirement plans will increase complexity. Plan sponsors will still need to meet rigorous fiduciary standards and carefully assess the risks and benefits of adding such options.
“Employers should not dismiss private equity due to cost alone,” Gomez said. “But they must ensure they have expert legal and fiduciary advisors, and fully vet any new offerings, including fee structures, transparency, liquidity, and risk-adjusted returns.”
