The White House Office of Information and Regulatory Affairs (OIRA) has concluded its review of a significant Department of Labor (DOL) proposal that could reshape retirement investing. The rule, if finalized, would clear the way for 401(k) plans—governing roughly $12 trillion in assets—to offer alternative investments such as private equity, real estate, and cryptocurrency to American workers.
OIRA completed its review on March 24, 2025, after the proposal entered the regulatory pipeline on January 13. This approval is a critical step, allowing the DOL’s Employee Benefits Security Administration (EBSA) to publish the proposed rule for public comment in the coming weeks.
Policy Shift Rooted in 2025 Executive Order
The initiative stems directly from Executive Order 14125, signed by President Donald Trump on August 7, 2025. The order directed federal agencies to reassess regulatory barriers limiting alternative assets in retirement plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). It specifically tasked EBSA with issuing new guidance within 180 days—a deadline that fell on February 3, though the rule’s publication was delayed during OIRA review.
The order framed expanded investment choices as a matter of economic freedom and retirement security, instructing not only the DOL but also the Treasury Department and the Securities and Exchange Commission to coordinate on removing perceived barriers to investment.
Addressing a Long-Standing Fiduciary Dilemma
At its core, the proposal tackles a persistent legal and practical question: can plan sponsors—typically employers—offer volatile or illiquid assets without breaching their fiduciary duties under ERISA? ERISA requires fiduciaries to act solely in participants’ best interests, managing plans with the care, skill, and caution a prudent person would use. Historically, the perceived risk of lawsuits for offering investments that underperform or carry high fees has made many employers wary of alternatives.
The forthcoming rule is expected to provide explicit regulatory comfort, stating that including options like private equity or crypto—provided fiduciaries conduct thorough due diligence and ensure clear participant disclosures—would not automatically constitute a breach of their fiduciary obligations. This seeks to reduce liability concerns that have effectively limited 401(k) menus to traditional stocks, bonds, and mutual funds.
Investor Sentiment: Cautious and Skeptical
While regulators push for expanded choice, the investing public appears hesitant. Recent survey data from Boldin, a financial planning platform, reveals significant caution among its user base—primarily experienced savers aged 45–65.
- Opposition outweighs support: 48% of respondents oppose allowing alternatives in 401(k)s, while only 34% support the idea.
- Minimal appetite for allocation: 80% say they are unlikely to allocate any portion of their 401(k) to alternatives, even if offered. Among those open to it, 78% would limit exposure to 5% or less of their portfolio.
- Risk awareness gap: While over 80% claim familiarity with alternative assets, 85% believe most retirement savers do not understand the associated risks, including volatility, illiquidity, and complex fee structures.
These attitudes contrast with some international trends. For instance, Aviva’s 2024 survey found 27% of UK adults open to using cryptocurrency in retirement plans, though risks like security threats and lack of regulatory protection remain top concerns.
Why the Disconnect? Expertise vs. Access
The divergence between regulatory policy and retail investor sentiment highlights a fundamental tension. Proponents argue that alternatives can enhance diversification and long-term returns, potentially benefiting average savers. However, critics, including many investor advocates and academics, warn that these assets are often unsuitable for the average 401(k) participant due to high minimum investments, opaque valuations, and multi-year lock-up periods.
The CFA Institute and other industry groups have previously cautioned that expanding access without robust investor education and fee transparency could expose unsophisticated participants to undue harm.
A Clear Reversal of Previous Policy
The current proposal marks a decisive shift from the prior administration’s stance. In 2022, the EBSA—then under the Biden administration—issued a compliance assistance release effectively discouraging 401(k) fiduciaries from offering cryptocurrency options. That guidance cited concerns over volatility, valuation difficulties, and immature custody infrastructure.
Trump’s 2025 executive order explicitly reversed this posture, positioning broader investment access as a driver of economic growth and retirement security. The new rule would formally replace the prior administration’s caution with a framework designed to encourage innovation in plan investment menus.
What Comes Next: Process, Politics, and Litigation
With OIRA review complete, the next formal step is the rule’s publication in the Federal Register. This will trigger a standard comment period, typically 30 to 90 days, during which industry stakeholders, consumer groups, retirement plan providers, and members of Congress can submit feedback.
After reviewing comments, EBSA will issue a final rule. The timeline for finalization remains uncertain and could extend many months. Legal challenges are highly likely from consumer advocacy organizations or state attorneys general, who may argue the rule fails to adequately protect participants from the unique risks of alternatives. Such litigation could significantly delay implementation, if not alter the rule’s final form.
Ultimately, the proposal represents a major policy experiment: whether the promise of higher returns and diversification for retirement savers outweighs the real risks of increased complexity, potential losses, and fiduciary uncertainty. The ensuing debate will test the balance between regulatory freedom and investor protection in one of America’s most important financial markets.
Disclosure: This article was edited by Vivian Nguyen. For more information on how we create and review content, see our Editorial Policy.
