Labor Dept. moves to open 401(k)s to crypto and alternative assets

The U.S. Department of Labor proposed a rule that would allow 401(k) plan fiduciaries to consider cryptocurrencies and other alternative assets, implementing President Donald Trump’s August executive order and setting up a 60-day public comment period once the proposal appears in the Federal Register.

The draft would create a safe harbor under the Employee Retirement Income Security Act for plans that meet specified standards when evaluating alternatives. Fiduciaries would be expected to review performance history, fees, liquidity, valuation methods, and product complexity before adding options such as digital assets, private equity, or real estate.

The department defines digital assets as investments that can be stored and transmitted digitally, including cryptocurrencies like Bitcoin and other tokens. The agency noted that, while plan managers have long had authority to consider alternatives, few have offered them in practice.

Trump’s order also directed the Securities and Exchange Commission to consider changes to regulations or guidance to help retirement savers access alternative assets. Treasury Secretary Scott Bessent, in a statement, called the proposal “an initial step” to carry out the order “in a safe and smart manner,” adding that it aims to broaden retirement plan options while protecting assets.

Deputy Secretary of Labor Keith Sonderling emphasized that the department will not favor specific products. “Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process,” he noted.

Some lawmakers objected to adding higher-risk exposures to retirement menus. “Trump has decided now is the time to stick these risky assets into Americans’ 401(k)s,” Senator Elizabeth Warren argued, citing weakness in private credit, lower private equity returns, and falling crypto prices.

Americans held about $10.1 trillion in 401(k) plans at the end of 2025, up from $9 trillion a year earlier, Investment Company Institute data show.

The Labor Department will accept public comments for 60 days after the proposal is published in the Federal Register. If finalized, the rule would guide plan sponsors on how to evaluate alternative investments within 401(k) plans under ERISA’s fiduciary standards.