Trump signs executive order expanding 401(k) investment options to include cryptocurrencies and private equity

The executive order directs the Secretary of Labor to review guidance regarding fiduciary duties regarding alternative asset investments in 401(k) and other defined contribution plans governed by ERISA. The order also directs the Department of Labor to clarify its position on alternative assets and the appropriate fiduciary procedures for asset allocation funds that include these investments.

In addition, the executive order directs the Secretary of Labor to consult with the Secretary of the Treasury, the Securities and Exchange Commission, and other federal regulators to explore possible parallel regulatory changes to support the purposes of this order.

More than 90 million Americans participate in employer-sponsored defined contribution plans, most of which are currently restricted from investing in alternative assets available to wealthy investors and government workers' retirement plans.

The White House said overregulation and the risk of litigation have limited fiduciaries of ERISA-covered plans from incorporating alternative assets into their portfolios, potentially hindering the growth of workers’ retirement funds.

Trump's Labor Department has rescinded guidelines on digital assets implemented by the Biden administration. The president had previously pledged to make the United States the "cryptocurrency capital" and emphasized embracing digital assets to drive economic growth and technological leadership .