Department of Labor Releases Proposed Rule on Alternatives in Defined Contribution Plans

The U.S. Department of Labor (DOL) has released a proposed rule aimed at expanding access to private market investments within 401(k) and other defined contribution retirement plans. The proposal follows the Administration’s August 2025 Executive Order focused on increasing access to alternative investments for retirement savers.

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The rule introduces a principles-based framework to guide fiduciaries in evaluating and allocating to private market assets, alongside a regulatory safe harbor designed to provide greater clarity and confidence in fiduciary decision-making under ERISA. The proposal emphasizes the use of diversified investment vehicles, such as target-date funds and managed accounts.

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The DOL also clarifies that fiduciaries are not required to prioritize overly conservative investment approaches at the expense of risk-adjusted returns, reinforcing that private market strategies may play a role in diversified retirement portfolios.

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Several elements of the proposal reflect long-standing priorities advanced by the Institute for Portfolio Alternatives, including recognition of private markets within defined contribution plans, a focus on fiduciary process through a clear safe harbor framework, and acknowledgment that diversified portfolios can include alternative investments alongside traditional assets.

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