The one question I have received regularly since President Trump issued his executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors” on August 7, 2025, is what happens next.
We saw a preview of this policy change in 2020. President Trump’s first Administration issued an information letter suggesting that Federal action could potentially encourage investment strategies where plan participant funds are allocated to alternative assets.
The Trump Administration’s Executive Order is the most significant expansion of U.S. retirement investment in decades. The policy change outlined in the August 7 Executive Order sheds light on the potential growth and diversification opportunities beyond traditional stocks and bonds that alternative asset investments will provide to plan sponsors.
Regulatory officials are now tasked with the important role of implementing the order in a way that helps foster innovation while ensuring market integrity.
The Executive Order directs U.S. government agencies to enable greater access for defined contribution plan participants to private equity, private credit, infrastructure, real estate, digital assets, and other non-publicly traded investments. It does not, however, relieve plan fiduciaries of their obligations to provide due diligence and to use their best judgment on the investment strategy.
It is important to point out that the Executive Order itself does not amend the pension or securities laws. It instructs the Department of Labor (DOL) and the Securities and Exchange Commission (SEC), in consultation with the Internal Revenue Service (IRS) and the Secretary of the Treasury, to propose new rules for fiduciaries and plan sponsors that will open the door to regulatory amendment to both the Employee Retirement Income Security Act of 1974 (ERISA) and the securities laws. These changes could have significant implications for the duties and compliance obligations of plan fiduciaries under ERISA, as well as affect disclosure and conduct standards pursuant to federal securities regulations.
Proposed rules are expected on February 3, 2026 (180 days after the Executive Order was issued) and final rules by late 2026, followed by DOL and SEC interagency harmonization on valuation, custody, and required disclosure by plan sponsors. The implementation of any new regulations is expected to be rolled out gradually over the following three years.
In a timely and welcome development, CUSIP Global Services announced expansion of its identifier system to include private market instruments for private credit, private equity, and non-public debt. This expansion complements the Executive Order’s implementation directions. Standardized identifiers for private assets, like their public counterparts, will help plan sponsors, custodians, and regulators track, determine value, and report holdings with precision and transparency.
In addition, it will facilitate compliance with SEC disclosure and reporting requirements and will provide interoperability between the public markets and private entities. The CUSIP expansion announcement will also provide the backbone that fiduciaries will need as they prepare to set up the infrastructure to manage private market assets as required by the Executive Order and subsequent regulatory implementation.
The inclusion of CUSIP identifiers for private market assets at the same time marks an essential assist to regulators on transparency and machine-readable interoperability for the emerging private market inclusion in 401(k) plans. It will be incumbent upon plan sponsors, asset managers, and private credit providers to engage in the implementation process by providing comment letters and guidance to regulatory staff on the best way to integrate private assets efficiently into defined contribution portfolios. If this is done well, it will serve as a model for the future expansion of global markets.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.