Private equity's next step into 401(k)s

The Trump administration's Department of Labor proposed rules yesterday to allow alternative assets like private equity in 401(k) plans, opening a two-month public comment period. The 105 uses of "prudent" or "prudently" throughout the rule emphasize process and benchmarks rather than claiming these assets will boost returns. Opposition is expected from those concerned about retirement savings exposure to higher risk, though the final rule is unlikely to reverse course given it stems from Trump's summer executive order. Private equity firms are already preparing marketing campaigns to drive individual demand once the rule is finalized, particularly as institutional backers have cooled on the asset class. Plan managers will differentiate themselves on how cautiously they enter alternatives—some via target-date funds, others with aggressive direct exposure.