Trump Signs Executive Order on 401(k) Alternatives
On August 5, 2025, President Donald Trump is set to tour Washington, DC, and make a notable announcement from the West Wing of the White House.
Recently, Trump signed an executive order aimed at expanding the roster of assets that can be included in 401(k) plans. This move opens the door to private equity, cryptocurrency, and real estate investments, as indicated by officials at the White House.
The order directs the U.S. Secretary of Labor to explore fiduciary advice regarding private market investments within 401(k)s and similar defined contribution plans, adhering to the guidelines established by the Employee Retirement Income Security Act of 1974 (ERISA). This law outlines minimum standards for most retirement plans.
The executive order, which was documented to happen around midday, is viewed as a significant win for the alternative asset sector. It encourages the increased utilization of private assets within defined contribution plans during Trump’s second term.
In response to the news, there was a slight uptick in private equity stocks, specifically with firms like Apollo Group experiencing an early boost in trading on that Thursday.
Historically, private market assets have been left out of 401(k) plans, even though they have been included in pension funds and university contributions. Nevertheless, in 2020, the Labor Department under the previous Trump administration deemed private market inclusion permissible under certain conditions, a decision that was later reaffirmed by the Biden administration.
The presence of private market options within 401(k) plans has grown. Asset managers and planning sponsors have developed products for retirement, collectively managing about $8.7 trillion in assets, as noted by Investment Company Research Institute data from the first quarter of 2025.
In June, BlackRock, the largest asset manager globally, announced the launch of a 401(k) Target Date Fund for the first half of 2026, which will allocate between 5% and 20% to private investments. Similarly, Empower, the second largest retirement planning provider in the U.S., is collaborating with asset managers like Apollo to introduce licenses for private assets later this year.
