Key Takeaways
- The Trump administration has issued an Executive Order about facilitating 401(k) investments in “alternative assets.”
- The Order directs the Secretary of Labor to examine current guidance and decide if it is appropriate for that purpose.
- The Order also directs the Secretary of Labor to issue guidance to clarify fiduciary responsibilities for 401(k) investing in alternative assets and to consider creating a fiduciary safe harbor.
This article examines the President’s August 7 Executive Order (EO) entitled Democratizing Access to Alternative Assets for 401(k) Investors (Democratizing Access to Alternative Assets for 401(K) Investors – The White House) and some of the misunderstandings about what the EO says.
The EO uses the term “alternative assets” and defines it as follows:
- Private market investments, which would include, among others, private equity, private debt, and hedge funds.
- Interests in real estate and debt instruments secured by real estate.
- Actively managed vehicles holding digital assets.
- Investments in commodities.
- Interests in projects financing infrastructure development.
- Lifetime income investment strategies including “longevity risk-sharing pools.”
