A newly proposed rule from the US Department of Labor could change the landscape of retirement savings by allowing 401(k) plans to offer alternative assets such as cryptocurrencies, private equity, and real estate alongside more traditional investment options. This move aims to diversify the retirement portfolios of American workers and provide them with broader investment choices.
Broader investment options under review
The Department of Labor’s Employee Benefits Security Administration issued the proposal after an executive order from US President Donald Trump in August 2025. The order highlighted the need to expand access to alternative assets in defined contribution plans, prioritizing improvements in diversification and potential returns.
The text of the executive order emphasized the Securities and Exchange Commission’s role in removing regulatory barriers. It called for revised regulations to enable participant-directed retirement plans to access assets outside conventional stocks and bonds.
“The Order directs the Securities and Exchange Commission to facilitate access to alternative assets for participant-directed defined-contribution retirement savings plans by revising applicable regulations and guidance,” the text of the order pointed out.
For context, the Employee Benefits Security Administration oversees the health and retirement benefits of American workers, ensuring plan integrity and participant protection. Its latest proposal signals an intention to adapt benefit management practices in line with changes in financial markets and investment products.
Reactions from top officials and sector developments
US Treasury Secretary Scott Bessent described the proposal as a foundational step in enacting the President’s directive, aiming to execute changes safely while expanding retirement investment possibilities for millions of Americans. Bessent also reiterated that investor protection remains a top priority throughout the process.
US Secretary of Labor Lori Chavez-DeRemer underscored that the proposed rule could help retirement plans select products reflecting the modern investment landscape. She argued that expanding the menu of available assets could ultimately benefit both workers and retirees by fostering innovation.
“This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today. This greater diversity will drive innovation and result in a major win for American workers, retirees, and their families,” Chavez-DeRemer noted in an official statement.
The proposal comes amid uncertainty in both crypto and private credit markets. While digital assets have demonstrated resilience despite global geopolitical pressures, the private credit sector is experiencing volatility fueled by fears of artificial intelligence disrupting software-dependent loans.
Recent stress in the private credit market has led to significant outflows, with major firms like BlackRock and Apollo capping investor redemptions after withdrawal demands outpaced quarterly limits. This reflects broader hesitancy in alternative assets, yet the Department of Labor’s initiative still suggests a push to keep retirement savings aligned with evolving financial products.
