Labor Department Rule on 401(k) Alternatives Enters White House Review Under No. 1210-AC38
Key Facts
The U.S. Office of Information and Regulatory Affairs listed the Labor Department’s final rule on fiduciary duties in selecting investment alternatives for review on November 5, 2026, under No. 1210-AC38. Its status appeared as “Pending Review” on the office’s page published on November 6. The measure’s arrival at the office signals that it is nearing completion and public release, according to Bloomberg Law. But the final text has not yet been published, and the review does not mean the rule has been finalized. The measure concerns how investment options in retirement plans are evaluated, and those options could include alternative assets, including investments linked to digital assets.
The measure is titled “Fiduciary Duties in Selecting Designated Investment Alternatives” and is handled by the Labor Department’s Employee Benefits Security Administration. The proposal published by the department on March 30, 2026, aimed to clarify the duty of prudence when selecting investment alternatives in participant-directed individual account plans. The proposal’s scope includes asset-allocation funds that may contain alternative investments. The idea is to provide a fiduciary safe harbor for plan officials who follow a specified evaluation process. The proposed change therefore focuses on the decision-making and fiduciary responsibility framework, rather than requiring every plan to offer a particular investment option.
The proposed safe harbor includes six evaluation factors: performance, fees, liquidity, valuation, performance benchmarks and complexity. The Labor Department said fiduciaries must study these factors objectively, comprehensively and analytically, then make decisions about them when selecting investment alternatives. The department emphasized that the proposal is neutral toward asset classes, meaning the framework does not designate any particular class in advance as the required option. Bloomberg Law reported that the proposal does not require plans to offer cryptocurrencies. The possibility that digital assets could be included in some options therefore depends on plan officials’ decisions under their fiduciary duty, not on a general requirement arising from the proposal.
The regulatory move followed an executive order issued on August 7, 2025, which asked the Labor Secretary to clarify the department’s position on alternative assets and fiduciary procedures related to asset-allocation funds that include them. The executive order’s definition of alternative assets included actively managed investment vehicles that invest in digital assets. On September 23, 2025, the department said it intended to issue a proposal clarifying fiduciaries’ duties regarding the availability of asset-allocation funds that include alternative investments, with the possibility of including safe harbors. On that day, it also issued an advisory opinion on lifetime income funds as qualified default investment alternatives. The department then unveiled the regulatory proposal in March 2026, before the final rule moved to White House review in November.
The issue matters because of the scale of employer-sponsored defined-contribution plans; the executive order said more than 90 million Americans participate in these plans. When announcing the proposal, the Labor Department said it aimed to expand retirement investment options for more than 90 million Americans. Adding investment alternatives could open a potential channel for retirement funds to flow into categories such as private equity and cryptocurrencies, according to a Reuters report on the proposal on March 30, 2026. But the report quoted a department official as saying the proposal does not dictate how plan providers should invest. This possibility also remains dependent on the final rule’s text and plan officials’ decisions after assessing risks and the specified factors.
The proposal prompted debate among market participants after its publication; Reuters reported on June 2, 2026, that the fund management industry supported it, while others raised concerns about its risks. The report estimated assets in 401(k) plans and other mass-market products cited at about 14.2 trillion dollars. That scale provides context for the importance of investment-selection rules, as any change in the scope of options could affect a broad market for long-term savings. However, these estimates and views date to coverage of the proposal in June and do not represent a reaction to a final decision issued in November. The measure remains under review by the Office of Information and Regulatory Affairs.
The Office of Information and Regulatory Affairs had completed an earlier review of the proposal on March 24, 2026, and classified the result as “Consistent with Change.” The public comment period on the proposal ended on June 1, 2026, while the regulatory actions schedule listed an analysis of comments in August. The schedule does not set a date for publication of the final rule. The current step is to complete the office’s review of the final rule and then make it public; the published information gave no specific date for that. Separately, the Bureau of Labor Statistics scheduled the November Employment Situation report for December 4, 2026, at 8:30 a.m. Eastern Time.