Why Employers May Be Wary of Adding Crypto or Private Equity to 401(k)s

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Why Employers May Be Wary of Adding Crypto or Private Equity to 401(k)s

A proposed federal rule aims to clear the way for retirement savings plans to include alternative assets. But it may not be enough to protect employers from lawsuits.

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President Trump wants to allow 401(k) plans to invest in private equity, private credit, real estate and cryptocurrency.

Credit...

Kenny Holston/The New York Times

By

Peter Coy

April 11, 2026,

8:00 a.m. ET

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Wall Street cheered when the Trump administration

proposed a rule

that would clear the way for 401(k) plans to include private equity, private credit, real estate and cryptocurrency. But the effort may not protect employers that add these sorts of alternative assets to their workers’ retirement plans as much as President Trump would like.

Until now, retirement plans have been mainly limited to stocks and bonds because alternative assets were deemed too risky, illiquid, complex or high in fees for individual savers.

Unfortunately for the deregulatory initiative’s proponents, it comes just as some alternative assets are looking dodgy. “As cracks emerge in the private credit market, private equity returns fall to 16-year lows and crypto keeps tumbling, President Trump has decided now is the time to stick all of these risky assets into Americans’ 401(k)s,” Senator Elizabeth Warren, Democrat of Massachusetts, said in a

statement

the day the proposed change was released.

The proposed rule could put employers in a bind. If they don’t offer more alternative investments, some of their workers and retirees, and the president, will be unhappy. If an employer does offer the alternatives and they go bad, the safe harbor may not be sufficient to shield the employer from lawsuits.

No immunity

Apollo, Blackstone, Blue Owl Capital and KKR have tried for years to make their alternative assets easier to purchase by the $12 trillion market of 401(k)s and related defined-contribution plans. They argue that diversifying into alternative assets would give workers more stable and secure retirements. They also say that because pension plans already include alternative investments, it’s only fair that workers with 401(k)s should have access to them, too.

The new rule, which the Labor Department proposed on March 30, is designed to give employers the confidence to let those assets in. It tells plan sponsors to evaluate all kinds of investment products on the same six criteria: performance, fees, liquidity, valuation, benchmarking and complexity. Any plan sponsor that follows that evaluation process will be presumed by the Labor Department to have fulfilled its fiduciary duty.

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