President Trump Issues Executive Order on Private Assets in 401(k) Plans

On August 7, President Donald Trump signed an executive order that encourages sponsors of 401(k) retirement plans and other participant-directed defined-contribution ERISA plans to consider including access to alternative investments, including: Private Equity; Private Credit; Real Estate; Digital Asset funds; Commodities; Project Financing; and Lifetime Income Investments.

Specifically, the executive order directs the Department of Labor (DOL) to reexamine the DOL’s guidance on a fiduciary’s duties regarding alternative asset investments and clarify the DOL’s position on alternative assets while prioritizing actions to curtail ERISA litigation in offering opportunities to plan participants. The executive order also instructs the DOL to work with Treasury and the Securities and Exchange Commission (SEC) to examine whether other regulatory changes are necessary.

This effort by the Trump Administration runs tandem with efforts at the SEC and on Capitol Hill to expand access for retail investors to private markets. According to a Kirkland & Ellis client alert, key considerations include ERISA litigation risk, understanding fee sensitivity, liquidity, valuation, and operational complexity, among other issues. In the coming months, the DOL will likely work with staff from the SEC and Treasury to engage in a rulemaking effort to address the topics outlined in the executive order.

Click here to read President Trump’s executive order.
Click here to read a fact sheet from the White House covering the executive order.
Click here to read a client alert from Kirkland & Ellis covering the executive order.