The Labor Department's final rule reshaping how 401(k) fiduciaries vet investment options — including private equity, private credit and digital assets — arrived at the White House budget office on Nov. 5, the last procedural stop before publication.
The Office of Information and Regulatory Affairs lists the rule, RIN 1210-AC38, as pending review. Its title is "Fiduciary Duties in Selecting Designated Investment Alternatives," and it comes from the Employee Benefits Security Administration. OIRA classifies it as economically significant, with no legal deadline attached.
What the Rule Actually Does
The measure is narrower than the "crypto in your 401(k)" framing suggests. It does not authorize any specific asset class. Instead it builds a safe harbor around fiduciary process, and that safe harbor applies to every designated investment alternative on a plan menu — index funds included.
Paragraphs (g) through (l) of the proposed text set out six factors a fiduciary must "objectively, thoroughly, and analytically consider": performance, fees, liquidity, valuation, performance benchmark, and complexity. A fiduciary who works through that process — including by relying on a prudently selected investment advice fiduciary — is "presumed to have met the duties under section 404(a)(1)(B) of ERISA" and is "entitled to significant deference."
The rule explicitly excludes brokerage windows and self-directed brokerage accounts from the definition of a designated investment alternative.
It implements section 3(c) of Executive Order 14330, "Democratizing Access to Alternative Assets for 401(k) Investors," signed Aug. 7, 2025. The order named private equity, private credit, digital assets and commodities among the asset classes at issue.
Litigation Risk Is the Real Target
The proposal's economic analysis makes the motive plain: fear of lawsuits, not regulation, has kept alternatives out of 401(k) menus. More than 500 excessive-fee cases have been filed since 2016, with over $1 billion paid in settlements. Defense costs run $5 million to $8 million through summary judgment, and $10 million or more at trial.
The result is a stark gap between plan types. Alternatives made up just 0.1% of all defined contribution plan assets in 2024. By contrast, they represent 34% of public pension fund holdings, and 68% of surveyed Fortune 1000 defined benefit plans held them, at 18% of total assets.
The department estimates the finalized rule will cut costs by $488.0 million in the first year and $591.9 million thereafter — savings driven almost entirely by reduced litigation exposure.
Scale and Opposition
The stakes are broad. In 2023 there were roughly 721,000 participant-directed individual account plans, covering about 118 million participants and more than $8.8 trillion in assets.
Comment letters split sharply before the June 1 deadline. SIFMA backed the "asset-neutral, process-based approach." The CFA Institute supported wider private-market access while pressing for stronger valuation and liquidity standards and a phased rollout. The Loan Syndications and Trading Association and the Investment Company Institute were also supportive.
The Economic Policy Institute opposed the rule outright, arguing it would gut protections for savers in ERISA-covered plans. Notably, the proposal would not fully bar participant claims over excessive fees or risky investment choices.
EBSA Assistant Secretary Daniel Aronowitz signed the proposal on March 24; it published March 31. OIRA review carries no fixed timetable.
Sources: Reginfo.gov (OIRA pending EO 12866 regulatory review, RIN 1210-AC38); Federal Register (proposed rule 2026-06178 and Executive Order 14330); SIFMA; Economic Policy Institute; CFA Institute; Loan Syndications and Trading Association; Investment Company Institute