John E. Chapman
Chief Executive Officer
On August 7, President Trump signed an executive order that could reshape the landscape of 401(k) retirement plans—potentially opening the door for alternative investments like cryptocurrency, private equity, and real estate.
As your co-fiduciaries, Clearwater Capital Partners is closely monitoring these developments to help you navigate emerging opportunities and challenges on behalf of your plan and its participants.
A Time for Thoughtful Review
The order directs the Department of Labor (DOL) to re-examine guidance on including alternative assets in defined-contribution plans. Over the next six months, regulators will clarify how these investments align with fiduciary responsibilities under ERISA.
This review is about more than new asset classes; it’s about ensuring that all investment decisions safeguard participants’ long-term financial well-being amid evolving regulatory expectations.
Flexibility—and Responsibility
This order intends to provide greater flexibility in investment options, reflecting the diverse needs and preferences of today’s workforce. As Labor Secretary Lori Chavez-DeRemer noted, this approach moves away from one-size-fits-all mandates.
However, greater choice comes with greater oversight. As your co-fiduciaries, we want to emphasize important considerations:
- Fiduciary Duty: Alternative investments can carry higher risk and less regulatory oversight. It remains critical aligning these options with the best interests of plan participants.
- Participant Education: Complex assets require clear, meaningful education so employees understand potential risks, fees, and volatility.
- Administrative Complexity: Adding private markets or digital assets can increase reporting requirements and operational demands.
- Cybersecurity: Strong controls and due diligence are essential to guard against fraud and cyber threats in digital asset management.
No Immediate Change—But Preparation Is Key
Although this executive order does not immediately change plan regulations, it initiates a regulatory review process. We recommend that plan sponsors:
- Stay informed on forthcoming DOL guidance.
- Review current investment lineups and fiduciary policies.
- Ensure fiduciary processes are equipped to evaluate alternative investment inclusion.
- Plan for participant education if these options are added in the future.
- Address administrative and cybersecurity considerations proactively.
Our Commitment as Your Co-Fiduciaries
At Clearwater Capital Partners, we remain dedicated to serving alongside you with clear insight and careful oversight. Our focus is on helping you meet fiduciary obligations thoughtfully while supporting your efforts to secure a strong, sustainable retirement future for your participants.
We will continue to monitor regulatory developments closely and provide timely guidance as this conversation unfolds.
For more information regarding this announcement, please visit www.whitehouse.gov.
20250821-2
