Private Assets May Be Coming to Your 401(k). You Should Know the Risks. On March 30, 2026, the U.S. Department of Labor proposed a new rule that would give 401(k) plan fiduciaries a clearer path to offering alternative investments—like private equity, real estate and infrastructure—alongside traditional mutual funds and index funds. This proposal follows Executive Order 14330, signed in August 2025, which directed federal agencies to expand retirement savers’ access to alternative assets. The rule aims to create a process-based safe harbor under the Employee Retirement Income Security Act (ERISA) that sets forth steps for plan fiduciaries to follow when selecting investment options for participant-directed defined contribution retirement plans. If finalized, the rule would give rise to a legal presumption that fiduciaries who follow the process satisfied their duty of prudence. The safe harbor applies to all investment selections—not just alternative investments—but was prompted by concerns that burdensome lawsuits and restrictive Department of Labor guidance have denied millions of Americans opportunities to benefit from investment in alternative assets. Proponents argue that alternative assets offer competitive returns and diversification opportunities, and are increasingly large portions of the portfolios of public pension and defined-benefit retirement plans. Critics, though, warn that private equity and private credit investments carry significant risks for retirement savers. These include limited liquidity, high fees, complex valuation methods, and less transparency compared to publicly traded securities. Some experts contend that the push to include alternative assets in 401(k) plans represents a “massive greed grab for Wall Street” that prioritizes asset manager profits over participant outcomes. Former Department of Labor leaders and industry groups have sought extended feedback on the proposed rule, citing the need for careful consideration of how alternative investments might affect long-term retirement security. Plan fiduciaries remain responsible for prudently selecting and monitoring investment options, regardless of whether they pursue the safe harbor process. The proposal reflects an ongoing debate about balancing access to potentially higher-return investments with the need to protect retirement savings from excessive risk and cost. As the rule moves through the federal regulatory process, stakeholders will continue to evaluate its implications for millions of Americans who rely on 401(k) plans for their financial security in retirement.
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