← Back to Portfolio for the Future™

Opening the Gate: A Brief Review of the DOL’s Proposed Rule on Alternatives in 401(k) Plans and Revisiting CAIA’s Position

April 8, 2026
Opening the Gate: A Brief Review of the DOL’s Proposed Rule on Alternatives in 401(k) Plans and Revisiting CAIA’s Position
iStockphoto: Jacqueline Nix

 

By CAIA Association’s Leadership Team

 

On March 30, 2026, the Department of Labor proposed a rule that would establish a formal safe harbor for plan fiduciaries who choose to include alternative investments – private equity, private credit, real estate, and digital assets – in 401(k) and defined contribution plan menus. The proposal is a direct response to President Trump’s Executive Order 14330 signed August 7, 2025, directing federal agencies to remove regulatory barriers to allow the roughly 90 million Americans in employer-sponsored 401(k)s and DC plans from access to the same asset classes available to public pensions and institutional investors. 

The proposed rule identifies six factors for fiduciary consideration: performance, fees, liquidity, valuation, benchmarks, and complexity. It does not permit standalone private fund access; exposure would flow through vehicles such as target-date funds and asset allocation funds. A 60-day public comment period is underway. 

CAIA Association, representing more than 14,000 Charterholders across 100 countries, has long engaged with the question of alternatives in defined contribution plans – not as an advocate for product proliferation, but as an educator committed to informed allocation.

Our View: Progress, But With Important Implications

From a policy perspective, we welcome the fact that the DOL’s proposed rule acknowledges the importance of offering more options to plan participants. The structural argument for giving retirement savers and plan sponsors access to asset classes long available to institutional portfolios has been a position that CAIA has long advocated. We have repeatedly said that, given the long-term nature of private assets combined with the long-term nature of the savings vehicle, that the 401(k) (or any other retirement plan) is a reasonable place to offer these assets.  

The recent proposed ruling from the DOL does not introduce anything new, in that private assets have always had the ability to be offered to plan participants. However, it does codify additional guidance around what’s expected to mitigate additional and unnecessary litigation risk for offering it. 

This level of regulatory clarity only goes so far. Alternative investments are complex and performance dispersion within asset classes puts a higher premium on access and understanding. We are steadfast in our view that any properly constructed fund menu offering private markets must place three principles at its foundation:

Positioning and Communication: Semi-liquid is not liquid. Mark-to-model is not mark-to-market. Private capital strategies may not be appropriate for every investor or every plan. Liquidity needs, time horizon, risk tolerance, and fee sensitivity must be evaluated at the participant level, not assumed away by the structure of the vehicle.

For this reason, it is imperative to empower plan sponsors and fiduciary staff to act as intentional gatekeepers, applying discretion to ensure that any investment choices offered are appropriate for the make-up, circumstances, and capabilities of the participant population—rather than defaulting responsibility to individual employees.

Once chosen, thoroughly and regularly communicating the portfolio purpose, risks, and liquidity implications is essential. 

Education: The fiduciary obligation of retirement plan gatekeepers, particularly plan sponsors and advisors, is critical with this evolution. They must understand redemption gates, quarterly caps, and illiquidity premiums before making informed choices on behalf of participants. Given the opaque and dynamic nature of private investments, proper professional training dedicated to alternatives should be a pre-requisite.

Due Diligence: The DOL’s six-factor framework is a good starting point and aligns well to what’s typical for long-only investment options. Since alternatives are more complex, fees, liquidity, valuation methodology, manager track record, and structural alignment of interests become even more important considerations.

The DOL's proposed rule is a meaningful step, but it is not a finish line. Regulatory clarity reduces friction for plan sponsors — it does not substitute for the analytical rigor that alternative investments demand, nor does it protect participants who do not understand what they own.

The history is instructive. Retail investors have encountered redemption gates, NAV discounts, and liquidity mismatches in alternative vehicles not because the underlying assets were fundamentally flawed, but because the gap between product complexity and investor comprehension was never adequately closed. Codifying a safe harbor does not close that gap. Suitability analysis, substantive education, and disciplined due diligence do.

CAIA's position has been consistent: access is not the same as appropriateness, and appropriateness is not the same as understanding. All three must be present before an alternative investment belongs in a retirement plan — regardless of what any regulatory framework permits.

As the 60-day comment period unfolds and the rule moves toward finalization, we encourage plan sponsors, advisors, and policymakers alike to hold that standard. The opportunity to meaningfully improve retirement outcomes through thoughtful private markets allocation is real. So is the risk of repeating the mistakes that have defined retail alternatives distribution at its worst. The difference between the two outcomes will not be determined by regulation but sits with the people responsible for putting these investments in front of participants and sponsors— and whether they do so with the care that responsibility demands.

 

Highlighted Works:

 

Further relevant works:

 

About the Contributors
 

CAIA Association’s Leadership Team consists of John Bowman, CFA, Craig Lindquist, Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP, Adele Kohler, CFA, Laura Merlini, CAIA, CIFD, MCSI, Steve Novakovic, CAIA, CFA, and Nick Pollard. With strategic hubs in Geneva, Hong Kong, and Massachusetts, and in collaboration with our Members and Board of Directors, our leadership and staff are committed to advancing the knowledge, integrity, and innovation that drive the future of alternative investments worldwide.  

 

Learn more about CAIA Association and how to become part of a professional network that is shaping the future of investing, by visiting https://caia.org/