DOL Proposes Process-Based Safe Harbor for Alternative Assets in 401(k) Plans

In March 2026, the Department of Labor published a proposed rule implementing the August 2025 executive order on expanding access to alternative assets in 401(k) plans. Rather than mandating alternative assets, the rule offers fiduciaries a process-based safe harbor: if a fiduciary follows a documented, multi-factor evaluation before adding an alternative investment — private equity, private credit, real estate, digital assets, infrastructure, or lifetime income strategies — that documented process creates a legal presumption the fiduciary satisfied their duty of prudence, regardless of how the investment later performs.

The rule's scope extends beyond alternative assets specifically, touching on how fiduciaries evaluate designated investment alternatives generally — a detail that has drawn attention from plan consultants, recordkeepers, and asset managers well beyond the alternative-investment space.

The comment period closed June 1, 2026. Given the rule's breadth and the volume of comments expected, a final version could look meaningfully different from the proposal — plan sponsors and their advisors should treat the current text as directional rather than final, with a final rule anticipated by the end of 2026.

Why this matters for advisors: a documented evaluation process — not investment outcome — is the standard being proposed as the fiduciary safe harbor. Advisors working with plan sponsors on menu design should expect "process documentation" to become a more explicit, and more heavily scrutinized, part of the fiduciary conversation regardless of whether a given plan ever adds an alternative asset.