EBSA Issues Proposed Rule on Alternative Assets in 401(k) Plans

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) on Monday, March 30, introduced a proposed regulation that would allow 401(k) retirement plan managers and investors to more strongly consider and utilize alternative assets as an investment option.

Alternative asset classes for 401(k)s generally include private equity and credit, real estate, digital assets (e.g., cryptocurrency), commodities (e.g., precious metals such as gold), infrastructure, and lifetime income strategies (e.g., longevity risk-sharing pools).

The EBSA proposal works to mobilize President Donald Trump’s Aug. 7, 2025, executive order, “Democratizing Access to Alternative Assets for 401(k) Investors.”

The proposed regulation, which was submitted to the Office of the Federal Register, explains the steps plan managers should take when considering alternative assets as a component in their investment lineups and establishes a set of process-based safe harbors for plan fiduciaries to use when selecting designated investment alternatives.

While defined contribution plan managers traditionally have had the authority to consider alternative assets, a minority have actively pushed such options given:

• The greater perceived investor risk from such asset classes; and,
• Guidance within a 2022 compliance assistance release from the administration of then-President Joe Biden, which directed plan fiduciaries to exercise “extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.” The Trump administration rescinded that guidance on May 28, 2025.

Under EBSA’s proposed rule, when selecting investment alternatives, plan fiduciaries would need to objectively, thoroughly and analytically consider, and make determinations on factors including performance, fees, liquidity, valuation, performance benchmarks and complexity. 

“This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today,” said U.S. Secretary of Labor Lori Chavez-DeRemer. “This greater diversity will drive innovation and result in a major win for American workers, retirees and their families.”

U.S. Secretary of the Treasury Scott Bessent added, “This proposed rule is an initial step in implementing the President’s executive order in a safe and smart manner, broadening access to additional retirement plan options for millions of Americans while being mindful of the importance of protecting retirement assets.” 

The proposed rule comes after the U.S. Office of Management and Budget announced on Wednesday, March 25, that it completed its review of the Department of Labor’s proposed rule, “Fiduciary Duties in Selecting Designated Investment Alternatives,” which also seeks to ease the inclusion of alternative assets in 401(k) plans.

Once the EBSA rule is included in the Federal Register, the public will have 60 days to provide feedback. At that point, EBSA would review and respond to significant public comments.

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