Breaking News: On August 7, 2025, President Trump issued an Executive Order aimed at “Democratizing Access to Alternative Assets for 401(k) Investors,” directing the Department of Labor to reexamine its current guidance on a fiduciary’s duties regarding alternative investments — such as private equity, hedge funds, and real estate — in defined contribution plans.
Although the DOL has not yet issued formal guidance implementing the Executive Order, plan fiduciaries (e.g., 401(k) plan committees) should begin evaluating how this policy shift could affect their investment menus, monitoring obligations, and litigation exposure.
As part of this review, committees should address issues around valuation and liquidity of these alternative investments, participant education, and fee transparency.
Even if new guidance offers a more favorable regulatory framework, ERISA’s core fiduciary standards remain unchanged — fiduciaries must continue to act prudently and solely in the interest of plan participants when evaluating such options.
Plan fiduciaries should consult with ERISA counsel to assess the potential impact of the Executive Order on current plan offerings, investment policy statements, and fiduciary governance practices.
Taking a proactive approach now — before DOL regulations are finalized — can help these fiduciaries stay ahead of evolving standards and mitigate future risks.