The DOL’s New Proposal Is About More Than Alts in 401(k)s  

Of course, the early chatter about the Department of Labor’s new proposed retirement plan investment selection rules has focused on alternative assets. 

The regulations were created, after all, in response to President Donald Trump’s Executive Order 14330, titled “Democratizing Access to Alternative Assets for 401(k) Investors.” Issued in August, the order called on DOL to facilitate the inclusion of alternatives like private equity, real estate and digital assets in 401(k) plans. Fast forward to April 2026, and it turns out, the regulations actually go a lot further than that: They also provide broad legal protections for the selection of any investment option within tax-qualified retirement plans, so long as the plan’s fiduciaries follow a prudent and well-documented process detailed in the proposal. 

That’s a great thing, several industry experts told Retirement Upside, especially in a context where well-meaning retirement plan sponsors have faced more than a decade of heightened litigation under the Employee Retirement Income Security Act. Some suits have had merit, to be sure, but many have used what independent legal experts see as apples-to-oranges comparisons of the fees and performance of vastly different investment options to allege wrongdoing by plan fiduciaries in an attempt to drive settlements (and big payouts for plaintiffs’ attorneys). 

“The proposed investment selection framework is a really positive development,” said Peter Ruffel, senior manager of defined contribution business at Captrust. “Innovation by advisors, asset managers and plan fiduciaries has been very much stymied by the threat of cookie-cutter lawsuits.” 

What’s in the Proposal 

If finalized as proposed, the framework should give clients real peace of mind and clarify their responsibilities as they build investment menus, Ruffel added. Interested parties have 60 days to submit comments on the DOL rule, which  introduces what agency officials called an objective approach that plan fiduciaries can use to gain what is known in ERISA law as a “presumption of prudence” when selecting plan investments. Specifically, it requires plan fiduciaries to carefully consider the following six features of any potential investment: 

• Performance
• Fees
• Liquidity
• Valuation
• Benchmarking
• Complexity

If they go through these points and find that an investment can deliver value to participants, they generally can’t be sued simply for making the selection. 

“I’m a fan of this approach,” said Joel Shapiro, head of Wealthspire Retirement Advisory. “It clarifies that ERISA gives fiduciaries meaningful discretion and flexibility to select investments, including but not limited to alternative assets. It’s especially important that it speaks about assessing investments according to their risk-adjusted returns net of fees. It’s not focused on fees or performance in a vacuum, as many of these lawsuits do.” 

What’s Not in the Proposal. As both Shapiro and Ruffel emphasized, the proposed regs apply only to the initial investment selection. They do not speak to a plan fiduciary’s equally important responsibility of monitoring investment fees and performance over time. “Based on language in the rule and its preamble, we’re expecting supplemental guidance on that topic sometime in the future,” Ruffel said.