Overview

• President Trump’s August 7 executive order directs the Labor Department to revise ERISA guidance to allow private equity, real estate and cryptocurrencies in 401(k) plans.
• The order tasks Labor Secretary Lori Chavez-DeRemer with specifying the fiduciary responsibilities of plan sponsors offering alternative asset funds.
• It requires coordination between the Labor Department, SEC and Treasury to develop complementary regulations for defined-contribution retirement accounts.
• The policy could unlock roughly $12.5 trillion in U.S. retirement savings for alternative asset managers seeking new inflows.
• Industry critics warn that adding illiquid and complex investments may increase fees, reduce liquidity and heighten legal exposure for plan administrators.