401(k) accounts are one step closer to fully embracing crypto, private equity

By Jessica Hall

A proposed Labor Department rule would give fiduciaries 'safe harbor,' protecting them from lawsuits

The median amount American workers have saved for retirement is $955, per the National Institute on Retirement Security.

People saving for retirement through their 401(k) plans are one step closer to being able to invest in alternative assets such as private equity and cryptocurrency.

On Monday, the Labor Department spelled out the steps managers of 401(k) plans should take when considering such alternative assets. The proposed rule establishes a set of "safe harbors" for plan fiduciaries, who have a duty to act in the best financial interest of their clients, to use when selecting investment alternatives.

Fiduciaries allowing their clients to invest in these assets would have to "objectively, thoroughly, and analytically consider, and make determinations on factors including performance, fees, liquidity, valuation, performance benchmarks, and complexity," the Labor Department said. Following these guidelines would give trustees of retirement accounts "safe harbor" status that would protect them from lawsuits, the agency said.

Comments on the proposed rule are due 60 days after publication in the Federal Register.

The proposal follows President Donald Trump's August 2025 executive order, "Democratizing Access to Alternative Assets for 401(k) Investors," which opened the doors for individual investors to get access to private equity, cryptocurrency, real estate and other alternative assets. Previously, only institutional investors and ultra-high-net-worth investors could invest in these areas. The move, seen as risky for individual investors, was hailed by Wall Street asset managers and private-equity firms, which see a lucrative market in Americans' retirement accounts.

Read: Here's what it's like to invest in private equity - and why you don't want it in your 401(k)

As of September 2025, Americans had $10 trillion in 401(k) plans across about 730,000 plans, serving about 70 million active participants and additional millions of retirees, according to the Investment Company Institute. Despite those collective numbers, the average American is struggling to save for retirement.

A recent report from the National Institute on Retirement Security found that the median amount American workers have saved for retirement is $955 - which includes people who have nothing saved at all. Among workers who have at least some retirement savings, the median is $40,000. In addition, Social Security is facing insolvency in six years if Congress doesn't act to shore up its finances. The average Social Security check is $2,076 a month as of February 2026, according to the Social Security Administration.

Read more: Six years away from Social Security's insolvency and lawmakers still can't agree on how to fix it

"Our goal is to deliver on President Trump's promise for a new golden age by fostering a retirement system that allows more Americans to retire with dignity," U.S. Labor Secretary Lori Chavez-DeRemer said in a statement. "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."

While managers of defined-contribution plans have always had the authority to consider alternative assets, almost none have done so. In 2022, the Biden administration issued a warning for fiduciaries about including cryptocurrency options in 401(k) plans, citing extreme price volatility, high-level speculation, valuation challenges and the potential for fraud or theft.

"This proposal is decidedly neutral and refrains from saying that any asset class is any better or worse than other investment types, as the law requires," said U.S. Deputy Labor Secretary Keith Sonderling.

The move toward opening 401(k)s to alternative investments has critics, who argue that it could open regular investors to greater risk, higher fees and less ability to access their money.

"As cracks emerge in the private credit market, private equity returns fall to 16-year lows, and crypto keeps tumbling, President Trump has decided now is the time to stick all of these risky assets into Americans' 401(k)s," Sen. Elizabeth Warren, a Massachusetts Democrat, said in a statement. "Americans facing an uncertain future in Trump's economy will now have more reasons to question the security of their retirement savings - all so that Trump's Wall Street buddies have another pile of cash to play with. Anyone who cares about the financial security of working people should oppose this proposed rule."

The proposed rule on alternative assets follows another effort by the Trump administration to address retirement savings. During his State of the Union speech, Trump said he would create retirement-savings plans for workers who don't have access to one through their employer, offering up to $1,000 a year in matching funds, in an effort to boost the retirement security of millions of Americans. No further details have been discussed since.

The retirement industry applauded the DOL's proposed rule.

"The Department of Labor's proposal represents an important and welcome step in advancing the President's executive order to modernize retirement plans for tens of millions of Americans. BlackRock supports this and other policy initiatives that thoughtfully expand access to investments historically out of reach, enhance diversification, and improve long-term outcomes," Martin Small, chief financial officer and global head of corporate strategy at BlackRock, said in a statement. BlackRock is an asset-management firm that is developing alternative-investment funds for 401(k) plans.

"For too long, everyday Americans have been shut out of private market investments that wealthy and pension fund investors have utilized to diversify their portfolios and drive returns. The department's proposed rule presents a clear and compelling roadmap for leveling the playing field for all investors, limiting the threat of trial lawyer lawfare, and putting the interests of American workers and retirees first," said Eric Ventimiglia, executive director of the Pinpoint Policy Institute, a conservative-leaning nonpartisan nonprofit that promotes free-market economic policies, focusing on energy, labor and capital investment.

-Jessica Hall

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03-30-26 1433ET