What Trump’s Executive Order Means for 401(k) Private Equity Access

(UNITED STATES) President Trump will sign an executive order on August 7, 2025, directing federal agencies to make it easier for 401(k) retirement plans to offer private equity, cryptocurrencies, and other alternative investments. This move could change how millions of Americans save for retirement, but the changes will not happen right away.

What Does the Executive Order Do?

The executive order does not change the rules immediately. Instead, it starts a process where agencies will study, review, and possibly rewrite the rules. This process could take until 2026 before any new investment options are available in most 401(k) plans. During this time, the DOL, SEC, and Treasury will gather public comments, talk to experts, and write new guidance.

Why Is This Important?

Traditionally, 401(k) plans have not included private equity or cryptocurrencies. These investments have been seen as risky, expensive, and hard to sell quickly. There are also concerns about transparency, meaning it can be hard for regular people to know exactly what they are investing in. In 2020, during President Trump’s first term, the DOL allowed some private market investments in retirement plans, but President Biden’s administration later rolled back those changes.

Private equity and crypto companies have pushed for more access to workplace retirement plans. They argue that these investments can help people diversify, or spread out, their retirement savings and possibly earn higher returns. However, these investments also come with higher risks and fees.

How Will This Affect 401(k) Participants?

If the new rules are approved, people with 401(k) plans could have more choices for where to put their retirement savings. This could mean:

• More diversification: People could invest in private equity, real estate, or crypto, not just stocks and bonds.
• Higher potential returns: Some private investments have earned more than public stocks in the past.
• Higher risk and fees: Private equity and crypto can lose value quickly, and they often charge higher fees.
• Less liquidity: It can be harder to sell these investments quickly if you need cash.

Hal Ratner from Morningstar points out that there are “roughly 25 times more individual firms in the private equity market than in the publicly traded one,” which could give savers more ways to spread out their risk. Still, experts warn that these investments are not right for everyone.

What Should Plan Sponsors Do?

Employers who offer 401(k) plans, called plan sponsors, will need to be very careful before adding private equity or crypto options. They must:

1. 📋 Do due diligence: Carefully study the risks and benefits of new investment options.
2. 📋 Consult fiduciary advisers: Work with experts who are legally required to act in the best interest of plan participants.
3. 📋 Follow new rules: Make sure they meet all legal and regulatory requirements.

Lisa Gomez, former Assistant Secretary of Labor for Employee Benefits Security, advises, “Be careful to not get caught in the hype. But we also shouldn’t be afraid. We should learn.” This means sponsors should not rush into new investments just because they are popular, but they should also not ignore new opportunities.

Impact on Asset Managers and Industry

The executive order opens a new market for private equity, crypto, and other alternative asset managers. Companies like BlackRock and Empower are already preparing new products for 401(k) plans. For example, BlackRock has announced a 401(k) target date fund launching in 2026 with a 5%–20% allocation to private investments. Empower will allow private assets in some accounts later in 2025.

Private equity and crypto managers see the executive order as a big win. They have lobbied for years to get access to the trillions of dollars in workplace retirement plans.

What About Regulators?

The DOL, SEC, and Treasury must work together to write new rules. They need to balance the goal of giving people more investment choices with the need to protect investors from risky or expensive products. The process will include public comments and could take until at least 2026 to finish.

Jaret Seiberg from TD Cowen says the order is just the start of a long process. He expects the rulemaking to last into 2026.

Future Outlook and Pending Developments

The regulatory process will unfold over the next 12–18 months. New rules are expected by 2026. Congress is also looking at new laws to regulate crypto markets. One bill about stablecoins has already become law, and another bill about broader crypto regulation is waiting for a Senate vote.

The Trump administration has said it wants to make it easier for people to invest in alternative assets and to lower barriers for crypto and private equity. This could mean more changes in the future.

Summary Table: Key Elements of the Executive Order

What Should You Do Now?

If you have a 401(k) plan, you do not need to make any changes right now. The rules are still the same, and new investment options will not be available until at least 2026. It is a good idea to talk to your plan administrator or a financial adviser before making any big decisions about your retirement savings.

Plan sponsors should start learning about private equity and crypto investments, but wait for clear guidance from the DOL, SEC, and Treasury before adding these options.

For more information, you can visit the official U.S. Department of Labor website, which will post updates as new rules are developed.

As reported by VisaVerge.com, the executive order is a major step toward opening up 401(k) plans to private equity, crypto, and other alternative investments. However, actual changes depend on future regulatory actions, and all stakeholders should watch for new rules and consult experts before making decisions.

In summary, President Trump’s executive order could change the way Americans save for retirement by allowing more investment choices in 401(k) plans. But for now, the process is just beginning, and it will take time for new options to become available. Stay informed, ask questions, and make careful choices about your retirement future.