> ## Content Index > Fetch the complete content index at: https://the-long-horizon.ghost.io/llms.txt > Use this file to discover other available public pages before exploring further. # Two versions of the same 401(k) menu now exist, and an executive order decided which one most plans get. - URL: https://the-long-horizon.ghost.io/two-versions-of-the-same-401-k-menu-now-exist-and-an-executive-order-decided-which-one-most-plans-ge/ - Published: 2025-08-13T12:00:00.000Z - Updated: 2025-08-13T12:00:00.000Z - Description: Private equity and real estate just got a green light into accounts that couldn't hold them two weeks ago. - Author: Jonathan Morgan - Tags: Long Horizon, #Import 2026-08-06 23:53 ## THE HORIZON Same plan participant, same December statement, ten years out. In the first version, his 401(k) menu still holds the same six index funds it held today, plain and liquid. In the second version, his plan added a private equity sleeve three years ago, and that sleeve now makes up 12% of his balance, priced quarterly instead of daily, illiquid but historically higher-returning. Both versions are livable. Which one his plan becomes depends on a decision his employer has not yet made, using authority that changed this week. On August 7, 2025, President Trump signed an executive order directing federal regulators to expand access to alternative assets, including private equity, private credit, real estate, and digital assets, inside 401(k) plans. ## THE EVENT President Trump signed Executive Order 14330, titled "Democratizing Access to Alternative Assets for 401(k) Investors," on August 7, 2025. The order directs the Department of Labor, the Securities and Exchange Commission, and other agencies to reexamine rules that have limited defined-contribution plan participants from investing in alternative assets, according to Debevoise & Plimpton's summary of the order. It also directs the Secretary of Labor to propose safe harbor guidance clarifying fiduciary duties for plan sponsors who choose to offer alternative asset allocation funds. On August 12, 2025, the Department of Labor rescinded a 2021 supplemental letter from the Biden administration that had narrowed the practical feasibility of offering alternative assets inside retirement plans, per Ogletree's analysis. The order does not itself change what any specific plan offers. It changes the regulatory environment plan sponsors operate inside when deciding whether to add these options. ## THE PATH The first consequence is optionality, not obligation. No 401(k) plan is required to add private equity, private credit, or real estate funds, but the fiduciary liability concerns that discouraged many sponsors from doing so were meaningfully reduced by the DOL's rescission. A builder whose plan adds an alternative asset sleeve over the next one to three years gains access to asset classes historically reserved for institutional investors and accredited individuals, at lower minimums than those markets have traditionally required. The second consequence involves liquidity mismatch. Private equity and private credit funds typically price quarterly, not daily, and often restrict withdrawals during specific windows. A builder allocating retirement savings to an illiquid sleeve needs to hold enough in liquid index funds within the same account to cover any near-term withdrawal needs, since the illiquid portion cannot be tapped on demand the way a mutual fund can. Plan sponsors will likely cap the illiquid allocation at a modest percentage for exactly this reason, but a builder should confirm that cap rather than assume it. The third consequence runs beyond the 401(k) and into fee structure. Private equity and private credit funds typically charge higher fees than index funds, often 1% to 2% annually plus performance fees, compared to a fraction of a percent for a broad index fund. Over a 20-year holding period, a 1.5-percentage-point fee difference on a 200,000 dollar allocation can reduce ending value by well over 100,000 dollars, even if the underlying alternative investment performs comparably to the index it might have replaced. The non-obvious consequence touches valuation transparency. Because private assets are not priced daily by a public market, a plan statement showing a stable or rising private equity valuation during a public market downturn may reflect a lag in reported pricing rather than actual outperformance. A builder comparing plan performance across asset classes should treat quarterly-priced alternative sleeves with more skepticism during volatile markets, not less, precisely because the smoother-looking chart is a function of pricing frequency. A further consequence touches business owners directly, since private credit funds are one of the vehicles this order targets, and those funds are themselves a growing source of financing for small and mid-sized businesses seeking capital outside traditional bank lending. ## THE WATCH Watch for Department of Labor safe harbor guidance, expected in the months following the August 7 order, which will shape how aggressively plan sponsors actually add alternative asset options. Watch individual 401(k) plan communications from employers over the next open enrollment cycle for whether alternative asset funds appear on the menu. The builder now knows the menu he sees at open enrollment next year exists because of a regulatory choice made this week, not because the underlying investments themselves changed at all. ### Sources Debevoise & Plimpton: Executive Order Clears Path for Alternative Assets in 401(k) Plans: [https://www.debevoise.com/insights/publications/2025/08/executive-order-clears-path-for-alternative-assets](https://www.debevoise.com/insights/publications/2025/08/executive-order-clears-path-for-alternative-assets?ref=the-long-horizon.ghost.io) Ogletree: Executive Order Opens Door to Alternative Assets in 401(k)s: [https://ogletree.com/insights-resources/blog-posts/executive-order-opens-the-door-to-alternative-assets-in-401ks-key-considerations-for-plan-fiduciaries/](https://ogletree.com/insights-resources/blog-posts/executive-order-opens-the-door-to-alternative-assets-in-401ks-key-considerations-for-plan-fiduciaries/?ref=the-long-horizon.ghost.io)