WASHINGTON — Montana workers with 401(k) retirement plans could soon gain access to the same high-return investments that have been largely reserved for wealthy individuals and government pension funds, following President Trump’s executive order signed Wednesday.
The order directs the Department of Labor to revise regulations that have prevented most private-sector workers from investing retirement funds in alternative assets like private equity, real estate investments, digital currencies, and infrastructure projects through their employer-sponsored plans.
“Today’s EO will level the playing field for millions of workers who are unable to invest in private equity, cryptocurrency, and other alternative assets,” said Sen. Steve Daines, who had urged Trump to take this action in a May letter to the White House.
Currently, more than 90 million Americans participate in employer-sponsored 401(k) plans, but most are limited to traditional mutual funds and bonds. Meanwhile, public pension funds and wealthy institutional investors have used alternative assets to achieve higher long-term returns.
Two-Tiered Investment System
The executive order addresses what Daines characterized as a “two-tiered system” where average workers are “relegated to investments in commoditized mutual funds with modest returns” while government employees and the wealthy benefit from higher-return alternative investments.
For Montana’s workforce—which relies heavily on 401(k) plans rather than traditional pensions—this regulatory change could significantly impact retirement outcomes. The state’s mining, agriculture, and small business employees have been locked out of investment opportunities that state pension systems routinely access.
According to research cited by Daines, public pension funds outperform private 401(k) plans partly due to their “higher allocations to alternative assets, particularly private equities, which usually have a higher expected return than most other asset classes.”
A Georgetown University study estimated that access to more diversified investment plans could increase retirement account values by 17 percent over the life of the plan.
Regulatory Timeline
The executive order gives the Department of Labor 180 days to reexamine current guidance that has discouraged plan sponsors from offering alternative asset options. The agency must clarify fiduciary duties and potentially rescind Biden-era restrictions on private equity investments in retirement plans.
Alternative assets under the order include:
- Private market investments and private equity
- Real estate investments and debt instruments
- Digital assets through managed investment vehicles
- Commodities
- Infrastructure development projects
- Lifetime income investment strategies
Plan fiduciaries would still need to carefully evaluate these investments, balancing potentially higher returns against increased costs and risks.
Legal and Litigation Concerns
Current restrictions stem not from federal law—the Employee Retirement Income Security Act doesn’t prohibit alternative assets—but from employers’ fear of litigation costs, according to Daines’ letter to Trump.
“It’s the fear by employers of the costs of meritless litigation that ignores the interests of the American worker, that has chilled the willingness of employers to offer alternative assets investment options,” Daines wrote.
The Trump administration had previously issued guidance in 2020 allowing professionally managed funds with private equity components, but the Biden administration revoked that safe harbor in 2021.
Implementation Challenges
While the executive order sets policy direction, actual implementation will depend on how the Department of Labor crafts new regulations and whether employers choose to offer alternative investment options.
The Securities and Exchange Commission is also directed to facilitate access to alternative assets for retirement plans by revising applicable regulations and guidance.
“I urge the Department of Labor to work expeditiously to implement the executive order with a regulatory safe harbor through a formal notice and comment rulemaking,” Daines said in his statement Wednesday.
For Montana workers, the changes could mean access to investment opportunities that have historically required million-dollar minimums and accredited investor status—democratizing Wall Street’s most exclusive asset classes through workplace retirement plans.