ATR and 22 Conservative Groups Submit Comment Letter to DoL in Support of Proposed Rulemaking to Expand Private Equity Access for 401(k) Plans 

On May 14^th, 2026, Americans for Tax Reform, along with 22 other conservative groups submitted a comment/coalition letter in support of the Department of Labor’s proposed rulemaking titled Fiduciary Duties in Selecting Designated Investment Alternatives. The proposed rule is a manifestation of President Trump’s executive order on democratizing access to alternative assets for 401(k) investors.  

The rule will help incentivize plan fiduciaries to offer less common investment options in 401(k) plans that have historically been excluded due to excessive litigation risks. Most 401(k) plans offer access to basic retail investment options such as mutual funds, exchange traded funds, and indices tracking major equity and bond indices. However, other assets that provide more upside potential for returns, such as cryptocurrencies, commodities, and private equity, are rarely available. In contrast, state pension funds and other public employee defined benefit plans not governed under federal law are permitted to invest in private equity and have reported the investment category to consistently stand out as the top-performing asset class in terms of returns.  

As established in the letter, the rule would address litigation risks by providing clarity for plan fiduciaries to evaluate alternative investments so that they are granted a presumption of prudence which indicates that fiduciaries performed their duties at the time of selecting such assets: 

In rectifying the long-persisting gap in regulatory clarification, the proposed rule will enable a safe harbor for fiduciaries seeking to offer alternative investment options. Fiduciaries who undertake a documented, prudent evaluation of alternative investments—considering factors such as fees, liquidity constraints, valuation methodology, manager expertise, and overall portfolio fit—will be granted a presumption of prudence based on the information available to them at the time of decision-making. This ensures that fiduciaries will not be held liable solely because an investment later underperforms, provided their decision making process meets the criteria for a presumption of prudence. 

The letter also addressed common misconceptions about the perceived riskiness of private equity. Evidence shows that private equity can increase diversification and returns adjusted for risk in a portfolio, as well as outperform high yield corporate debt during periods of major financial stress, debunking the notion that private equity is excessively risky for retirement savers and retail investors: 

A study of 1,600 U.S. buyout funds found approximately 2.1% in added annual risk-adjusted returns relative to public equities, indicating the advantage extends beyond raw return to return per unit of risk. Crucially, even lower-quartile buyout funds still outperformed public equity benchmarks, demonstrating that the gains are broad-based and not limited to a handful of elite  managers—a critical consideration for retirement savers evaluating the downside risk of less established funds. Another alternative asset class, private credit, has outperformed the Bloomberg USD High Yield Corporate Index in 14 of 20 years from 2005 through 2024, while suffering lower loss rates during periods of stress, including the 2008 financial crisis. 

The letter concludes with a call to the Department of Labor to expedite the rule’s implementation and ensure millions of Americans can benefit from President Trump’s executive order: 

By providing a clear safe harbor framework, the Department would remove the unintended barriers that have prevented millions of American workers from accessing a broader and more effective investment universe for their retirement savings. This rule would increase investment choice for retirement savers, enhance returns and diversification, and fulfill the intention of Executive Order 14330 to fully democratize access to alternative assets. 

The letter can be read here.