The U.S. Department of Labor’s Employee Benefits Security Administration today issued its long-anticipated proposed regulation, “Fiduciary Duties in Selecting Designated Investment Alternatives,” which it says will increase potential retirement investment options for more than 90 million Americans.
“This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today.”
Secretary of Labor Lori Chavez-DeRemer
This comes on the heels of the White House Office of Management and Budget finishing its review of the proposed rule on March 25. A 60-day comment period begins once the proposed rule is published in the Federal Register.
The proposed regulation explains the steps that managers of 401(k) plans should take when considering alternative assets as a component in their investment lineups and establishes a set of process-based safe harbors for plan fiduciaries to use when selecting designated investment alternatives. The proposal follows President Trump’s Aug. 7, 2025 Executive Order, “Democratizing Access to Alternative Assets for 401(k) Investors.”
That EO directed the DOL to address investment selection for alternative investments, such as private equity and private credit.
“Our goal is to deliver on President Trump’s promise for a new golden age by fostering a retirement system that allows more Americans to retire with dignity. This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today. This greater diversity will drive innovation and result in a major win for American workers, retirees, and their families,” said U.S. Secretary of Labor Lori Chavez-DeRemer.
“The Treasury Department is proud of this rulemaking effort, which is another step in ushering in President Trump’s Golden Age,” said Secretary of the Treasury Scott Bessent. “This proposed rule is an initial step in implementing the President’s Executive Order in a safe and smart manner, broadening access to additional retirement plan options for millions of Americans while being mindful of the importance of protecting retirement assets.”
SEC Chairman Paul S. Atkins also chimed in on today’s release of the proposed rule. “Americans’ ability to participate more fully in innovation and economic growth through well-diversified long-term investments is a vitally important priority for effective retirement planning,” Atkins said. “The Securities and Exchange Commission is pleased to have joined our colleagues at the Department of Labor to help formulate this proposal for these long-overdue improvements. We look forward to continuing our work to expand opportunities for Americans to build wealth and save for the future.”
In its press release today, the DOL said the proposed regulation reflects long-standing retirement law principles. Prudence under ERISA is grounded in process and plan fiduciaries are given maximum discretion and flexibility in selecting any particular investment as a designated investment alternative.
Under the proposed rule, when selecting investment alternatives, plan fiduciaries would need to objectively, thoroughly, and analytically consider, and make determinations on factors including performance, fees, liquidity, valuation, performance benchmarks, and complexity.
While managers of defined contribution plans have always had the authority to consider alternative assets, historically, almost none have done so. In today’s press release, the DOL noted that in 2022, the Biden Administration “further stifled these investments” through a rescinded compliance release that warned fiduciaries about including cryptocurrency options in 401(k) plans. The guidance deviated from the Employee Retirement Income Security Act’s requirements and marked a departure from the department’s decades-long approach to fiduciary investment decisions, today’s release said.
“The department’s days of picking winners and losers are over. Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process,” said U.S. Deputy Secretary of Labor Keith Sonderling. “This proposal is decidedly neutral and refrains from saying that any asset class is any better or worse than other investment types, as the law requires.”
ARA ‘strongly supports’ rule
In a press release today, the American Retirement Association said that at its core, the DOL’s proposed rule underscores the importance of a disciplined approach to investment selection. It reflects continuity of—not a departure from—the established ERISA fiduciary framework, offering additional guidance without fundamentally altering the rules of the road.
ARA continued to say that most central to that framework is the rule: it is asset-neutral. The Department is not substituting its judgment for the fiduciary’s and is not placing the government’s thumb on the scale. The rule does not require, favor, or endorse any particular asset class. Nor does it suggest that fiduciaries must include private assets—or any other specific investments—within a retirement plan. Instead, the proposed rule ensures investment decisions remain firmly grounded in fiduciary judgment, not regulatory preference.
“The proposed rule is not an endorsement of any particular type of asset class. Rather, this rule reinforces that fiduciary decision-making remains asset-neutral and grounded in process.”
American Retirement Association CEO Brian Graff
Importantly, ARA said the proposed rule upholds the robust fiduciary standard established by ERISA, which has served as a strong safeguard for participants’ interests for over 50 years. “Fiduciaries may consider the full universe of legally permissible investments and must evaluate those options through an ERISA-compliant prudent process for the best interests of participants and beneficiaries. That foundational principle remains unchanged—appropriately so,” the ARA release states.
Where the rule adds value is in its articulation of what that ERISA-compliant prudent process can look like in practice, ARA added. The Department provides additional guidance on investment selection, benchmarking, and evaluation, thereby helping fiduciaries execute their responsibilities. The proposed rule offers more direction, not a regulator-driven checklist of investments. Ultimately, ARA said the focus remains where it should be: on fiduciaries making decisions in the best interests of their particular participants and beneficiaries.
“Plan sponsors and their fiduciary advisors, not the federal government, are in the best position to assess market developments and determine what will be in the best financial interests of participants and beneficiaries,” said Brian Graff, CEO of the American Retirement Association. “The proposed rule is not an endorsement of any particular type of asset class. Rather, this rule reinforces that fiduciary decision-making remains asset-neutral and grounded in process. Clarity matters in a principles-based system, and by providing additional guidance on how to evaluate and monitor investment options, the Department has given fiduciaries a clearer roadmap for meeting their obligations while preserving the flexibility they need to act in the long-term best interest of the tens of millions of American workers relying on 401(k) plans for their retirement.”
The American Retirement Association concluded its release by saying it strongly supports the proposed rule for its “meaningful guidance and commitment to upholding the integrity of the ERISA fiduciary framework,” and that it looks forward to working collaboratively with policymakers and stakeholders to ensure its successful implementation and to reinforce ERISA’s principles, which protect participants’ best interests.
More industry reaction
401(k) Specialist has compiled industry reaction from a wide variety of sources that have provided statements and commentary since the proposed rule was released Monday morning, and will continue to update it. Check out the reaction at this link.
SEE ALSO:
• Industry Leaders React to DOL Proposal Expanding Alternatives to 401(k)s
• Coming (Very) Soon: Public’s First Look at DOL Proposed Rule on Alternative Investments
• Wait Continues for DOL Proposed Rule on Alternative Assets