The U.S. government has taken a decisive step toward reshaping retirement savings by authorizing regulators to clear the way for “alternative assets” including cryptocurrencies, private equity, and real estate to be offered in 401(k) and similar workplace retirement plans. An executive order issued recently directs the Department of Labor (DOL) and other agencies to revisit their longstanding restrictions and create a path for these options to become available to employees under these schemes. Prior to this, most 401(k) participants were effectively locked out of alternative markets.
Asset managers and retirement service providers are already preparing for the shift, exploring product structures such as managed cryptocurrency funds, private real estate portfolios, and target-date funds that integrate alternatives. Still, these products are unlikely to reach participants before 2026, as regulators work through rulemaking, compliance frameworks, and fiduciary standards.
From a compliance standpoint, digital assets present the steepest challenge. Forthcoming DOL and Securities and Exchange Commission (SEC) guidance is expected to clarify disclosure obligations, governance requirements, and custody rules, particularly in relation to crypto’s volatility and valuation risks. Plan sponsors will need to scrutinize service provider contracts, AML and cybersecurity safeguards, and operational risk controls to ensure they meet evolving fiduciary standards.
At the same time, participant protection will be a central concern. Higher-risk offerings like cryptocurrencies will require clear fee disclosures, plain-language risk explanations, and simple opt-out mechanisms. Documenting the decision-making process for including such options will be critical, particularly in anticipation of safe harbor provisions designed to insulate sponsors from liability when acting prudently.
The policy shift is being welcomed by the alternative investment sector as a potentially transformative development, one that could redirect a portion of the $8.7 trillion in U.S. 401(k) assets toward non-traditional markets. For crypto specifically, the move is expected to spur the launch of SEC-compliant digital asset funds tailored for retirement accounts, complete with new rules on custody, valuation, and market surveillance.
For plan sponsors and administrators, however, the opportunity comes with complexity. Offering alternatives will not simply be a matter of “adding more options.” It will require rethinking governance, enhancing compliance, and building robust frameworks for risk disclosure and participant education. In that sense, the U.S. government’s order is less about broadening menus overnight and more about setting the stage for a fundamental shift in the way retirement savings are structured, regulated, and safeguarded.
Disclaimer: The information published in the above newsletter is collected from various sources in electronic medium and analyzed by the firm. The reader is advised to consult the attorney qualified in their jurisdiction, before acting on any information contained in this newsletter. India Juris excepts no liability what so ever in this regard.
