In March 2026, the U.S. Department of Labor (DOL) published a proposed regulation in response to President Trump’s Executive Order, “Democratizing Access to Alternative Assets for 401(k) Investors.” The proposed regulations outline six factors that plan fiduciaries must consider to establish a safe harbor when selecting designated investment alternatives for participant-directed retirement plans. The factors are performance, fees, liquidity, valuation, performance benchmarks, and complexity. With the proposed regulation, the administration seeks to make it more likely that plan participants can access alternative assets, such as private equity, private credit, real estate, and infrastructure investments.
Based on data cited by the DOL, only 4% of defined contribution plans offered alternative assets in 2024, and only 0.1% of defined contribution plan assets were invested in them. If the proposed regulation is adopted, those percentages will likely increase, but hurdles remain, including the litigation risk against plan sponsors and the need for plan sponsors to build the expertise to confidently choose alternative investment options for their participants.
For individual investors, the proposed regulation is important because future exposure to private assets may come not only from direct commitments to traditional drawdown funds or semi-liquid vehicles, but also indirectly through target date funds and other retirement plan options. Households will need to manage their total exposure across all accounts, including retirement accounts, which could vary significantly, to ensure that they meet their overall desired allocation to private assets.
Steve was formerly the Chief Investment Officer and Head of Private Markets at Manulife Investment Management. In this role, he was responsible for leading global investment teams across a wide range of asset classes, including private equity and credit, real estate, infrastructure, timber, and agriculture. Steve has served as a director of many public and private companies during his career, including two of Manulife’s U.S. SEC-registered investment advisors.
Important Notice: Private Markets Navigator does not provide investment advice, and the information should not be construed as such. Investing in private asset funds is risky, with potential for total loss and long-term liquidity restrictions. Read our full dislaimer.