Trump Executive Order Full Text: Making Alternative Assets More Accessible to 401(K) Investors

Original Title: DEMOCRATIZING ACCESS TO ALTERNATIVE ASSETS FOR 401(K) INVESTORS

Original Source: The White House, USA

Original Translation: Golden Finance

By the authority vested in me as President by the Constitution and the laws of the United States, it is hereby ordered:

Section 1: Purpose. Many wealthy Americans, as well as government workers participating in public pension plans, have the ability to invest in a variety of alternative assets or benefit from such investments. However, despite over 90 million Americans participating in employer-sponsored defined contribution plans, the vast majority of these investors do not have the opportunity to directly or through their retirement plans participate in the potential growth and diversification benefits of alternative asset investments.

Trustees of 401(k) plans and other defined contribution retirement plans must carefully review and consider various aspects of private placement products, including the investment manager's ability, experience, and effectiveness in managing alternative asset investments. They do so to protect the retirement accounts of the Americans they oversee and fulfill their fiduciary duty of prudent, safe investment.

During my first term, my administration issued an information letter in 2020 recognizing that prudent federal action can promote the expansion of investment strategies whereby a portion of retirement plan participants' interests are allocated to alternative assets, similar to institutional investors.

However, the onerous litigation challenging the sound decisions of loyal and regulated trustees, coupled with the suffocating Department of Labor guidance I have issued since my first term, has deprived millions of Americans of the opportunity to benefit from alternative asset investments. These assets, increasingly prominent in public pension and defined benefit retirement plan portfolios, not only offer competitive returns but also provide opportunities for diversified investments.  

Regulatory overreach combined with litigation brought by opportunistic trial lawyers has stifled investment innovation, resulting in 401(k) plan and other defined contribution retirement plan participants mostly being limited to asset classes that yield returns far below the long-term net returns achievable by public pension funds and other institutional investors.

My administration will ease regulatory burdens and litigation risks that have impeded American workers' retirement accounts from achieving competitive returns and asset diversification, which are vital to ensuring a dignified and comfortable retirement.

Section 2: Strategy. The policy in the United States is that every American preparing for retirement should have the opportunity to access funds that include alternative asset investments, provided that the relevant plan fiduciaries determine that such an opportunity can provide plan participants and beneficiaries with a reasonable opportunity to enhance their retirement asset net returns after adjusting for risk.

Section 3: Democratizing Access to Alternative Assets. (a) For purposes of this order, "alternative assets" means:

(i) Private market investments, including direct and indirect ownership interests in equity, debt, or other financial instruments not traded on public exchanges, including investment managers (as applicable) seeking to actively influence the management of these companies;

(ii) Direct or indirect real estate ownership interests, including debt instruments secured by direct or indirect real estate ownership interests;

(iii) Holdings of actively managed investment products invested in digital assets;

(iv) Direct and indirect commodity investments;

(v) Direct and indirect interests in infrastructure development financing projects; and

(vi) Lifetime income investment strategies, including pooled longevity risk funds.

(b) Within 180 days of the date of this order, the Secretary of Labor (hereinafter "Secretary") shall reexamine the Department of Labor's past and present guidance regarding fiduciaries' duties under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (29 USC 1104), related to offering asset allocation funds that include alternative asset investments to participants. In conducting this reexamination, the Secretary shall consider whether to revoke the Department of Labor's Supplemental Private Equity Statement issued on December 21, 2021.

(c) Within 180 days of the date of this order, the Secretary shall, where appropriate and consistent with applicable law, further seek to clarify the Department of Labor's position on alternative assets and appropriate fiduciary practices related to offering asset allocation funds that include alternative asset investments under ERISA. Such clarifications must be aimed at determining the standards fiduciaries should use to prudently balance the potential for increased expenses with the goals of seeking higher long-term net returns and broader investment diversification. The Secretary shall also, where deemed appropriate, propose rules, regulations, or guidance to clarify fiduciaries' obligations under ERISA to plan participants when deciding whether to offer asset allocation funds that include alternative asset investments, including potentially calibrated safe harbor provisions. In carrying out the instructions in this section to further the policy set forth in this order, the Secretary shall give priority to taking action to curb ERISA litigation that limits fiduciaries' ability to use their best judgment to offer investment opportunities to relevant plan participants.

(d) When carrying out the provisions of this section, the Secretary shall consult, as needed, with the Secretary of the Treasury, the Securities and Exchange Commission (SEC), and other federal regulatory agencies to achieve the policy objectives of this order, including parallel regulatory changes that other federal regulatory agencies may incorporate.

(e) The SEC shall engage with the Secretary to consider ways to facilitate investment in alternative assets for participants in Participant-Directed Self-Directed Retirement Savings Plans (PDS). Such facilitative measures may include but are not limited to considering amending SEC regulations and guidance related to Accredited Investor (AI) and Qualified Purchaser (QP) qualifications to achieve the policy objectives of this Executive Order.

Section 4: General Provisions.(a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

(d) The expenses of issuing this order shall be borne by the Department of Labor.

Donald J. Trump

     

The White House

August 7, 2025