On August 7, 2023, President Donald Trump is set to sign an executive order that will allow the inclusion of private equity, real estate, cryptocurrency, and other alternative assets in 401(k) retirement accounts. This move aims to expand investment options for participants in defined-contribution retirement savings plans. According to a White House official, the order instructs the Securities and Exchange Commission (SEC) to revise regulations and guidance to facilitate access to these alternative assets.
Additionally, the order will require the Labor Secretary to work with other federal agencies, including the Treasury Department and the SEC, to evaluate whether similar regulatory changes should be implemented across those entities. The initiative is expected to benefit large alternative asset managers such as Blackstone, KKR, and Apollo Global Management by potentially opening up the $12 trillion market dedicated to retirement funds to their investment strategies.
However, there are concerns from critics that incorporating alternative assets into traditional retirement accounts could increase risks for investors. The executive order is poised to be signed at 12:00 PM ET, as confirmed in a public schedule released by the White House. This development reflects an ongoing trend towards diversifying retirement investment options but also raises questions about the potential risks involved for individuals planning for their retirement.
Overall, the upcoming executive order represents a significant shift in investment policy for retirement accounts, aiming to provide greater access to alternative asset classes while sparking debate on the balance between opportunity and risk in retirement savings.
