Trump reportedly plans order to open 401(k)s to private markets: What it means for your retirement

President Donald Trump is reportedly preparing to sign an executive order that would expand access to private-market investments in retirement accounts.

The Wall Street Journal reported, citing people familiar with the matter, that the order would direct the Labor Department and Securities and Exchange Commission to develop regulatory guidance for employers and plan administrators about the inclusion of private assets in 401(k) retirement plans.

The Journal’s sources indicated that the order’s details aren’t yet finalized and are still subject to the administration’s review ahead of an announcement.

Private-market investments, also known as private assets, include private equity, venture capital, real estate and hedge funds that aren’t traded on public exchanges.

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Private assets are typically characterized by higher risk and potentially higher returns compared to traditional investments like stocks and bonds that are traded on public markets.

Bryan Corbett, president and CEO of MFA, a trade association that represents alternative asset management options such as private credit and hedge funds, touted the anticipated order as giving investors the ability to further diversify their investment portfolio in a Reuters report.

“Expanding access to alternative investments in 401(k) retirement plans will provide more Americans with the diversification and investment options needed to build wealth and save for a successful retirement,” Corbett said.

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During Trump’s first term, the Labor Department indicated in a 2020 letter that firms may responsibly include private equity in certain investment products like target-date funds if they carefully consider the risks and fees associated with their inclusion.

The Biden administration reversed that policy the following year, with the Labor Department saying it does “not endorse or recommend such investments.”

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In anticipation of the Trump administration’s planned move on private-market investments in retirement funds, several firms have taken steps to put out investment products that include such assets.

The Journal noted that Apollo Global Management and State Street have released a target-date fund that includes a private-markets component, while Blue Owl Capital indicated this week it will collaborate with Voya on products that include private markets in 401(k) investments.

Reuters contributed to this report.