Trump’s Executive Order: Unlocking 401(k) Funds for Crypto, Private Equity, and Real Estate Investments

Trump Executive Order Opens Door for Crypto, Private Equity, and Real Estate in 401(k) Plans

By Tara Siegel Bernard, The New York Times – August 7, 2025

President Donald Trump signed a significant executive order on Thursday aiming to broaden the investment options available in 401(k) and related employee retirement plans, which collectively contain approximately $12.2 trillion in savings.

The order directs the U.S. Labor Department, the federal agency that oversees retirement plans, to revisit and potentially revise its fiduciary guidelines concerning alternative assets such as cryptocurrency, private equity, and real estate. It also calls for clearer rules about the proper procedures for offering funds that include these alternative investments.

A Shift From Previous Administration Stance

While current regulations do not explicitly ban plan operators from including these nontraditional asset classes in retirement plans, the executive order marks a notable policy shift from the Biden administration, which had previously warned about the risks associated with crypto investing—a cautionary stance the Trump administration has since rescinded.

This new approach seeks to increase flexibility for investors by encouraging the incorporation of a wider range of investment options within retirement accounts. However, the foundational law governing retirement plans, the Employee Retirement Income Security Act (ERISA), remains unchanged. ERISA mandates that fiduciaries—employers or plan administrators—act prudently and solely in the best interests of plan participants when selecting investment options.

Cautious Response From Employers and Experts

Despite the executive order’s encouragement, experts anticipate that employers will proceed cautiously before adding alternative assets like cryptocurrencies or private equity to their 401(k) offerings. The volatile nature of digital assets such as Bitcoin introduces challenges in deeming them “prudent” investments under fiduciary rules, and plan sponsors risk potential legal exposure if investments are perceived as imprudent or excessively costly.

Currently, cryptocurrencies remain rare in most retirement plans, even as they have become more accessible to mainstream investors through products like exchange-traded funds (ETFs). Similarly, private equity investments—which are not publicly traded and typically harder to access—are also uncommon in 401(k) menus. However, financial giants such as BlackRock are actively developing new products that include private equity holdings, including targeted-date funds expected to launch next year.

Arthur Laby, vice dean and law professor at Rutgers Law School, emphasized that while executive orders carry weight in shaping policy directions and regulatory actions, they do not override well-established fiduciary laws developed through decades of court rulings. “Executive orders can be influential, but they do not necessarily erase well-developed fiduciary law jurisprudence honed by the courts over many decades,” he explained.

Fiduciary Responsibility Means Enhanced Due Diligence

The inclusion of alternative investments will require employers and fiduciaries to conduct even more in-depth due diligence due to the inherently opaque nature of assets like private equity. Jerome Schlichter, a lawyer specializing in retirement plan lawsuits, highlighted the complexity in vetting private equity funds, noting the need for extensive investigations into investment structures, fees, and performance metrics.

Edward Gottfried, vice president at Betterment—an investment advisory firm managing $19 billion in retirement assets—pointed out that fiduciaries must ensure investments have reasonable fees and track general market returns before adding them to plan menus. Betterment currently does not include digital assets as standard options within employer-sponsored 401(k) plans.

Labor Secretary Lori Chavez-DeRemer praised the order, stating it aligns with the department’s mission to “improve flexibility and eliminate unfair one-size-fits-all approaches” for plan participants. The executive order also instructs Secretary Chavez-DeRemer to coordinate with Treasury Secretary Scott Bessent, the Securities and Exchange Commission, and other federal regulators to evaluate whether further regulatory changes are necessary to implement this policy effectively.

Looking Ahead

“The executive order seems like it’s more of a starting gun,” Edward Gottfried remarked, suggesting that while the directive sets an encouraging tone, definitive changes in retirement plan offerings will likely evolve slowly as fiduciaries weigh risk, prudence, and legal responsibility.

As this policy landscape develops, retirement investors could see more diversified plan menus that include alternative assets. However, until regulatory clarity is fully established and more products become available, employers and plan sponsors are expected to continue cautiously navigating these emerging investment options.

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