The Labor Department's 401(k) Alternatives Rule Reached White House Review on 5 November: What Fund Managers Courting Retirement Plans Should Check

On 5 November 2026 the US Department of Labor's Employee Benefits Security Administration sent a final rule titled "Fiduciary Duties In Selecting Designated Investment Alternatives" to the White House for regulatory review. The federal review log lists it as a final rule, marks it economically significant and shows no legal deadline. The rule follows a proposal the Labor Department published on 30 March 2026 and implements an executive order from August 2025 on access to alternative assets in 401(k) plans. The text of the final rule is not public. For fund managers weighing a retirement-plan product, the useful question is what the proposal asked plan fiduciaries to document, because that is the information a plan committee will want from you.

What happened

The review step is the last interagency check before a final rule can be published, and it usually precedes public release, though the timing is not fixed and no legal deadline applies. The federal review log, as of 7 November 2026, shows the rule as pending review with a received date of 5 November 2026. The executive order, signed in August 2025 and titled "Democratizing Access to Alternative Assets for 401(k) Investors," directed the Labor Secretary to clarify the department's position on alternative assets and on the fiduciary process for offering asset allocation funds that contain them, including through appropriately calibrated safe harbors.

What the proposal said

The proposal of 30 March 2026 would create a process-based safe harbor under the Employee Retirement Income Security Act (ERISA). Fiduciaries who follow the listed steps when selecting investment options for participant-directed defined contribution plans would be entitled to a legal presumption that they satisfied the duty of prudence on those factors, and the proposal said such a determination would receive significant deference. The safe harbor covers every investment selection, not only alternatives, although the executive order is what prompted it. It lists six factors: expected performance, fees and expenses, liquidity, valuation, benchmarking and complexity. The list is non-exhaustive, so fiduciaries must still consider other factors they know, or should know, are relevant. The proposal also included illustrative examples, several of which deal with features common in private-market funds, including limited liquidity, fair-value pricing procedures and the use of alternative assets inside diversified asset allocation strategies.

Dates to note

The executive order is dated August 2025. The proposal is dated 30 March 2026 and went through a public comment period. The final rule reached the review office on 5 November 2026. Whether the six-factor safe harbor survived the comment period intact, how the final text describes alternative assets, and what effective date the department chose will only be clear when the review ends and the rule is published. We do not know when that will happen.

How it fits with other recent changes

This is one of several regulatory moves aimed at widening access to private markets. We reported that the SEC proposed to widen retail access to private markets and that the SEC proposed to treat accredited investors as qualified clients. Most recently, the SEC raised the small-entity threshold for investment advisers from $25 million to $1 billion in assets on 4 November 2026. Our note on the UK consultation on pension trustees' fiduciary duty guidance covers a parallel effort in another market. The Labor Department rule would apply to the plan sponsors who choose the menu, not to managers directly, so the compliance question for a manager is mostly about the information a plan fiduciary will ask you for. That is our reading of how the proposal is structured. It also means the investors on the other side of this change are plan committees and their advisers, a different audience from the pension funds most managers already track.

What to check

This section is our suggestion, not guidance from the Labor Department. First, wait for the final text before launching or marketing a product on the strength of the proposal, because the final rule may differ. Second, map your data to the six proposed factors: net expected performance after all fees, an all-in fee and expense figure, redemption and liquidity terms, your valuation policy and frequency, the benchmark you use and why, and a plain-language description of complexity. Third, remember that plan committees may choose an asset allocation fund that holds your strategy rather than your fund itself, so ask whether the sponsor of such a fund will want separate reporting. Fourth, review your due diligence questionnaire answers on valuation and liquidity, since the examples in the proposal focus on those features. Fifth, if you market to plan advisers, have your regulatory and legal counsel review the materials against both the new rule and your existing marketing obligations. Sixth, decide now who inside your firm will own the plan-committee relationship, since a retirement-plan channel needs different reporting and servicing from an institutional fund. Seventh, track the publication of the final text and its effective date, and revisit this list once you have read it. You can see which institutions are allocating to private markets while you wait.

This is not legal advice. Consult a qualified lawyer on how the rule and your own obligations apply to you.

FundLinx Intelligence | FundLinx.ai