DOL Opens Door to Alternative Assets in Retirement Plans
Most retirement plans in the United States, particularly 401(k)s and other defined contribution (DC) plans subject to ERISA, are built around publicly traded mutual funds that invest in stocks and bonds. Target date or risk-based funds remain the default choice for many participants, and alternatives such as private equity or cryptocurrency have been rare.
That’s beginning to change. In early 2025, the Department of Labor (DOL) reversed course and withdrew its caution on cryptocurrency, and in August it did the same for private equity. In between those two moves, President Trump issued an executive order to expand access to alternative assets and to develop safe harbors for fiduciaries. These actions apply most directly to 401(k) and certain 403(b) plans, though the discussion may also influence 457 plans and the federal Thrift Savings Plan over time. To help clients, prospects, and others, WhippleWood CPAs has summarized the key details below.
Overview for Plan Sponsors
Today, retirement plans are overwhelmingly invested in public markets. Vanguard reports that 75% of defined contribution plan assets were invested in equities in 2024, showing how heavily these plans rely on stocks. Alternatives are nearly absent, except for some publicly traded real estate investment trusts or commodity funds. Private equity and digital assets have not generally been a part of most retirement plan portfolios.
However, in May, the DOL rescinded its 2022 guidance that had warned fiduciaries to exercise extreme caution before adding cryptocurrency to retirement plans. The department’s new position returned to a more neutral application of fiduciary principles, leaving it to plan sponsors to evaluate the prudence of including digital assets based on the facts and circumstances.
In August, President Trump issued an executive order directing the DOL, along with the Securities and Exchange Commission and the Treasury Department, to expand access to a wider range of alternative assets in retirement plans. The order specifically referenced private equity, real estate, infrastructure, commodities, and digital assets. It instructed the agencies to propose guidance and to consider new safe harbors that could reduce litigation risk for fiduciaries who include diversified funds with alternative allocations.
A few days later, the DOL followed through with another policy change. It rescinded its 2021 supplemental statement that had discouraged fiduciaries from adding private equity to defined contribution plans, particularly in smaller plans. The fiduciary process is not affected. All things considered, it seems that regulators are signaling that private equity, real assets, or even crypto could become more common options in the near future.
What to Expect
The executive order included an 180-day deadline for the DOL to propose rules or guidance, which means that by February 2026 sponsors should expect new guidance. This may take the form of compliance assistance, safe harbors, or updates to qualified default investment alternative requirements. The goal is to clarify how fiduciaries can evaluate funds with allocations to private markets or digital assets without increasing litigation exposure.
Even with new rules, fiduciary responsibilities remain intact. Under the Employee Retirement Income Security Act (ERISA), retirement plan sponsors must continue to evaluate fees, liquidity, transparency, and the reasonableness of the investment process. Safe harbors can reduce risk but do not eliminate it. Sponsors will need to document due diligence and consider whether plan participants can tolerate less liquid and more complex investments.
Industry response has been mixed. Some of the largest employers have started testing the waters by adding limited private equity allocations inside target date funds or collective trusts. Among mid-size and smaller companies, however, adoption has been slower. Many sponsors remain cautious about fees, liquidity, and the potential for litigation if alternatives underperform.
Key Considerations
It’s important to note that policy changes may create new investment options, but fiduciary duties have not changed. With that in mind, plan sponsors will want to be aware of a few key areas:
- Alternatives will likely appear through target date funds or collective investment trusts, not as standalone options.
- Participant communication and disclosures will be important since fees, liquidity, and risk differ from traditional funds.
- Safe harbors may reduce but will not eliminate fiduciary risk; due diligence and documentation remain critical.
- Watch for DOL guidance by February 2026, possible SEC actions on investor definitions, and new product launches from asset managers.
What’s Next?
For now, retirement plans remain centered on mutual funds that invest in stocks and bonds. The recent changes at the DOL and the August executive order, however, signal a new openness to private equity, private credit, private real estate, private infrastructure, and potentially crypto in the years ahead. Plan sponsors will want to monitor developments as new guidance is issued. This is a significant policy shift that may create new future investment options, but fiduciary duties have not changed. There are still real risks and potential liability for employers in this area. Future potential policy reversals in this area could be very problematic, given private funds do not trade on public exchanges.
If you have questions about the information outlined above, you should contact the investment advisor assigned to your retirement plan. Investment advice requires an investment license; ERISA further restricts that to only investment advisors who are held to a fiduciary standard. The investment advisor assigned to your retirement plan is also likely knowledgeable about your business and employee participants, and if adding such options (as an allocation inside of a target date fund or direct allocations) would be prudent. If you need assistance with your next retirement plan audit, WhippleWood CPAs can help. For additional information call 303-989-7600 or click here to contact us. We look forward to speaking with you soon.
About the Author

Rick Whipple CPA
Rick’s career in public accounting began in 1978. He was a co-founder of WhippleWood CPAs in 1981 and became its CEO in 2004. His experience as an entrepreneur and small business owner over the span of 40 years is vital to his success as a CPA and small business advisor.