On March 31, 2026, the Employee Benefits Security Administration (EBSA) published a proposed rule to clarify fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) when selecting designated investment alternatives for participant-directed individual account plans. The proposed rule also advances the objectives of Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors,” by facilitating the inclusion of alternative assets in retirement plan investment options.
The proposal would expand the range of investment alternatives available to plan fiduciaries, including those overseeing small business retirement plans. Alternative asset vehicles—such as private equity, private credit, real estate, and commodities—have traditionally been less accessible to small businesses due to high minimum investment requirements, long lock-up periods, and regulatory limitations. EBSA intends for this rulemaking to provide clearer guidance on how fiduciaries may prudently incorporate these assets while meeting their obligations under ERISA.
Advocacy explained that expanding access to alternative assets could benefit small businesses and their employees by improving portfolio diversification, supporting more stable income streams, and increasing capital formation for non-publicly traded businesses. Because alternative assets often have lower correlation with traditional markets, their inclusion may help mitigate volatility and enhance long-term risk-adjusted returns.
Advocacy recommended that EBSA provide additional clarity to ensure that expanded fiduciary requirements do not unintentionally discourage investment in small businesses or create unnecessary compliance burdens. Advocacy looks forward to continued engagement with EBSA to help ensure that the final rule supports both prudent fiduciary decision-making and improved access to capital for small businesses.
COMMENT LETTER
Fiduciary Duties in Selecting Designated Investment Alternatives; Docket No. EBSA-2026-0166
(PDF, 314 KB)
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