Trump Signs Executive Order to Expand 401(k) Investment Options to Private Assets and Cryptocurrency
August 8, 2025 – In a significant move aimed at broadening retirement investment opportunities for American workers, President Donald J. Trump signed an executive order on August 7, 2025, that eases the way for private market assets and cryptocurrencies to be included in 401(k) plans.
The order directs the Secretary of Labor, in coordination with the Treasury Department and the Securities and Exchange Commission (SEC), to review and revise existing regulatory guidance on fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA). This review focuses on the inclusion of alternative investments like debt, equity, credit, infrastructure, and digital assets within employer-sponsored defined-contribution plans.
Purpose and Background
Currently, more than 90 million Americans participate in defined-contribution retirement plans such as 401(k)s, but most have limited access to a diverse array of investment options available to wealthier individuals and public pension plans. The executive order aims to democratize access to alternative assets, providing potential benefits in terms of portfolio diversification and the possibility of higher returns.
During his first term, Trump’s administration had issued guidance to encourage some allocation towards alternative assets. However, regulatory overreach and lawsuits targeting fiduciary decisions have restricted innovation and limited retirement plan participants’ ability to invest in these asset classes. This order seeks to roll back such constraints, fostering more flexible and diversified investment choices.
Key Provisions of the Executive Order
- Labor Secretary Review: Within 180 days, the Secretary of Labor must reassess past and current fiduciary duty guidance under ERISA related to alternative assets in 401(k) plans.
- Interagency Coordination: The order mandates consultations with the Treasury Department, SEC, and other regulators to align regulations and potentially update rules to facilitate alternative asset inclusion.
- SEC Involvement: The SEC is tasked with modifying its regulations and guidance to increase access to alternative assets for participant-directed retirement plans.
- Elimination of One-Size-Fits-All Guidance: The order emphasizes flexibility, arguing the federal government should not uniformally dictate retirement investment strategies.
Reactions and Implications
Brian Graff, CEO of the American Retirement Association, praised the order, highlighting that professional fiduciaries, rather than federal agencies, are best positioned to evaluate investment options in participants’ financial interests.
Labor Secretary Lori Chavez-DeRemer underscored the order’s goal to eliminate unfair regulatory obstacles and support retirement plan fiduciaries’ discretion in offering alternative assets.
Industry experts and major plan providers like Vanguard acknowledge that while private assets—such as private equity and real estate—may provide useful diversification and potentially higher returns, these investments come with higher risks and complexity. Education for retirement investors is crucial to ensure an understanding of these risks and opportunities.
Concerns remain that broad access to alternative assets and cryptocurrencies in retirement accounts could expose participants to volatile and illiquid investments. Some providers are cautious about early adoption due to potential costs and liability risks stemming from legal challenges.
Potential Impact on 401(k) Investors
If implemented effectively, this executive order could transform the landscape of 401(k) investing by enabling participants to include alternative assets like private equity, infrastructure projects, and various cryptocurrencies within their retirement portfolios. Such diversification is common in public pension funds and institutional investment but has been largely inaccessible to individual workers’ defined-contribution plans.
Ultimately, the success of this initiative depends on regulatory agencies’ timely and balanced revisions to rules and safeguards ensuring fiduciaries make prudent, informed investment decisions in participants’ best interests.
Looking Ahead
The Labor Department has up to 180 days to begin updating guidance, with further interagency rule changes expected following consultations with the Treasury and SEC. Investors and retirement plan sponsors can anticipate gradual changes expanding alternative asset options within 401(k) accounts over the coming year.
This move signals a major shift in U.S. retirement policy, aiming to democratize access to a wider range of investments and potentially improve retirement outcomes through diversification and innovation.