US Labor Department Proposes 401(k) Rule to Expand Access to Crypto and Private Equity

TLDR

• The US Labor Department proposed a new 401(k) rule on March 30, 2026.
• The rule could expand access to crypto, private equity, and other alternative assets.
• It creates a six-factor safe harbor for fiduciaries selecting plan investments.
• The proposal does not apply to brokerage windows or self-directed brokerage accounts.
• Public comments will be accepted for 60 days after publication in the Federal Register.

The US Department of Labor has proposed a new rule that could widen retirement investment options for more than 90 million Americans. The proposal would give 401(k) plan fiduciaries a clearer process for considering alternative assets, including private equity, real estate, infrastructure, commodities, and digital assets such as cryptocurrency.

The rule was issued by the Employee Benefits Security Administration on March 30, 2026. It follows President Donald Trump’s executive order on expanding access to alternative assets in 401(k) plans. The department said the proposal is designed to reduce regulatory burden and litigation risk while keeping fiduciary standards tied to process.

Labor Secretary Lori Chavez-DeRemer said the proposal is meant to reflect today’s investment landscape. Treasury Secretary Scott Bessent said the effort is part of a broader push to widen retirement plan choices while protecting retirement assets. SEC Chair Paul Atkins also said the proposal could expand long-term wealth-building opportunities for savers.

The proposed regulation is titled “Fiduciary Duties in Selecting Designated Investment Alternatives.” It would establish a process-based safe harbor for fiduciaries under ERISA when selecting plan investment options in participant-directed defined contribution plans.

Proposal Returns Focus to Fiduciary Process

The Labor Department said the rule is asset-class neutral. It does not require any plan to add crypto, private equity, or any other alternative asset. It also does not ban any asset class, unless that investment is otherwise illegal under existing law.

Instead, the proposal returns to the long-standing ERISA principle that prudence depends on process. The department said fiduciaries should have maximum discretion in selecting investments, as long as they conduct a careful, objective review.

The proposal also marks a policy shift from earlier guidance. In 2022, the Biden administration warned fiduciaries about including cryptocurrency options in 401(k) menus. The new rule would replace that approach with a broader framework that does not single out digital assets for special treatment.

The department said defined contribution plan managers already had the authority to consider alternative assets. Still, very few plans used them because of legal uncertainty and rising litigation risk. The proposal cites years of fee litigation involving retirement plans and says a clearer framework may reduce that pressure.

Six Safe Harbor Factors Set the Standard

Under the proposed rule, fiduciaries would need to assess six core factors when reviewing investment alternatives. Those factors are performance, fees, liquidity, valuation, performance benchmarks, and complexity. The department said decisions made through that process would be presumed reasonable.

On performance, fiduciaries would need to compare a reasonable number of similar options and review expected risk-adjusted returns. Regarding fees, they would need to determine whether the costs are appropriate relative to expected returns and other plan benefits.

Liquidity is also part of the framework. The proposal says retirement plans do not need to hold only fully liquid products. Still, fiduciaries must decide whether an investment has enough liquidity for both the plan and individual participants.

The valuation factor requires fiduciaries to confirm that an investment can be valued accurately and in a timely manner. The benchmark factor requires each investment to have a meaningful comparison standard. Complexity requires fiduciaries to determine whether they understand the product or need qualified outside help.

Rule Would Not Cover Brokerage Windows

The proposed safe harbor would apply to designated investment alternatives in participant-directed plans. It would not apply to brokerage windows or self-directed brokerage accounts. That means the rule focuses on plan menu selection, not on every possible investment route within a retirement account.

If finalized, the rule could make it easier for plan sponsors to consider adding alternative assets without assuming those products will trigger automatic regulatory concern. At the same time, fiduciaries would still remain responsible for documenting decisions and acting in the interest of plan participants.

The Employee Benefits Security Administration said it protects more than 156 million workers, retirees, and family members. It oversees about 801,000 private retirement plans and benefit plans holding roughly $13.8 trillion in assets.

The department is now inviting public comment on the proposal. Comments will be accepted for 60 days after publication in the Federal Register. Until then, plan sponsors and fiduciaries are expected to review the proposed six-factor framework and consider its potential impact on future 401(k) investment decisions.