Executive Order on Alternative Investments Issued

President Trump has issued an Executive Order aimed at increasing access to alternative investments for 401(k) and other defined contribution plans. According to a fact sheet, the order directs the Department of Labor—in consultation with the Secretary of Treasury and the Securities Exchange Commission (SEC)—to reexamine guidance and clarify a fiduciary’s duties and appropriate processes regarding alternative investments in ERISA-governed defined contribution plans. The order also directs the SEC to update necessary guidance to facilitate access to alternative investments for defined contribution retirement savings.

The fact sheet notes that while more than 90 million Americans participate in employer sponsored defined contribution plans, most are currently restricted from investing in alternative assets (such as private equity, real estate, and digital assets)­, which may offer competitive returns and diversification benefits.