As 2026 approaches, investors and fiduciaries continue to monitor the current Administration’s effort to roll back regulations that manage access to alternative assets historically discouraged for retirement planning by participants of 401(k) and other defined contribution plans. In an August 7, 2025 executive order (EO), President Trump directed the federal government to re-examine current guidance that limits investment access to assets not typically traded on public exchanges including:
- private market investments
- real estate investments
- vehicles investing in digital assets
- commodities
- infrastructure financing projects
- lifetime income investment strategies
Of particular interest to the EO was the Department of Labor’s (DOL) “Supplemental Private Equity Statement”, issued nearly four years previously on December 21, 2021, which discouraged fiduciaries against recommending alternative asset holdings in participant-directed defined contribution plans. The EO, “Democratizing Access to Alternative Investments for 401(k) Investors”, points to overbearing regulations and a litigious environment that prevents individual participants from access to assets currently available to institutional investors and pension plans, and which could help secure long-term net benefits.
How Has the DOL Responded to the “Democratizing Access” Executive Order?
Less than a week following passage of the EO, the DOL took its first step. On August 12, 2025, the agency rescinded the “Supplemental Private Equity Statement” and shifted the agency’s position from an “extreme care” standard concerning alternative assets, thereby clarifying that plan fiduciaries could, in the future, evaluate such assets based on standard Employee Benefits Security Administration (EBSA) principles and opening the possibility of expanded safe harbors and minimizing the likelihood of litigation.
Over a month later, on September 23, EBSA released an advisory opinion suggesting a lifetime income investment option could be considered a qualified default investment alternative (QDIA) should it meet regulatory requirements under federal law. The opinion protects fiduciaries from presenting such products to plan participants under a QDIA safe harbor and demonstrates the agency’s move away from the extreme care standard for a particular kind of alternative asset product investment.
Since the September opinion, however, the DOL has proposed no additional rulemaking.
“Democratizing Access to Alternative Investments” and the SEC
The EO also directs the Securities and Exchange Commission (SEC) to “consider ways to facilitate access to investments in alternative assets by participants in participant-directed defined-contribution retirement savings plans” through regulatory changes that allow easier access to alternative asset categories. One opportunity explicitly mentioned in the EO is that the SEC re-consider guidance related to “accredited investors” and “qualified purchasers”, current classifications that restrict certain private investment offerings to select investors. Updated classifications could increase access by additional defined contribution plan participants.
The SEC’s role will likely not be limited to its examination of these classifications, however. The EO has made it clear the agency should remain available for ongoing consultation with the DOL and the U.S. Treasury Department (Treasury) with a goal of achieving a comprehensive government-wide framework that cuts back participant restrictions to alternative asset investments.
What Role Does the U.S. Treasury Department Have in the “Democratizing Access” Executive Order?
Finally, the EO addresses the consultative role of Treasury though with less precise language. While Treasury is not expected to participate in regulatory rule-making proposals, the agency has the oversight responsibility to advise on the tax impacts of alternative asset investments. Should DOL, which is expected to lead the inter-agency coordination, propose new, scaled-back regulations, Treasury would play a valuable role aligning the new framework with the nation’s tax and fiscal policies.
Does the Democratizing Access Executive Order Change Existing Laws?
The EO does not change existing laws but, instead, directs federal agencies to re-examine current rules and guidance related to investment access to alternative assets. Once the DOL proposes new rules, they will be made available for public feedback and, barring any significant challenge, become binding law in the original or amended format.
The Investment Environment and the Current Administration
The Democratizing Access EO is a thematic continuation of the current Administration’s move from regulations that manage access to investment options. A May 28, 2025 DOL action rescinded 2022 guidance, which had directed retirement plan fiduciaries to exercise “extreme care” before including cryptocurrencies as investment options. Updated guidance at the time shifted the agency to a neutral position on cryptocurrencies, thereby providing fiduciaries with a safe harbor, as similarly provided in the September 23 advisory opinion for lifetime income investment options.
The Democratizing Access EO sets an 180-day deadline for agencies to provide guidance and propose new rulemaking regarding access to alternative assets. According to this timeline, the picture of a less prohibitive regulatory environment should be available by early February 2026. The details may as yet be unknown but the intent—improving access of participant-directed 401(k) and other defined contribution plans to a variety of alternative assets historically discouraged by “extreme care” guidance—is very clear.
How Windham Brannon Can Help
We will continue to monitor these developments closely. If you have questions about how these changes may impact your retirement strategy, please contact Anne Morris or your Windham Brannon advisor.
