The Fine Print on Your Retirement Savings

The Trump administration calls it "democratizing." Senator Elizabeth Warren calls it another giveaway to billionaires. Here's what it actually does.

Apr 23, 2026

Last month, the Department of Labor published a proposed rule affecting the nearly $7 trillion sitting in American workers’ 401(k) plans. It arrived under an executive order the Trump administration titled “Democratizing Access to Alternative Assets for 401(k) Investors.”

This rule makes it easier for employers to allocate workers’ retirement savings to risky, hard-to-sell investments such as private equity and private credit funds. Wall Street has been trying to get access to retirement funds for more than a decade.

This proposed rule is part of a broader effort by this administration to protect Wall Street at the expense of ordinary people. Some of those efforts are happening in plain sight: extending tax cuts for the wealthy while cutting health insurance subsidies for people who need them. But many more are happening at the regulatory level, with little public discussion.

Why Wall Street Needs This Now

Private equity firms buy companies using borrowed money, hold them for years, and then sell them at a profit. That model worked well when interest rates were near zero. When rates rose sharply in 2022, it stopped working. The industry is now sitting on an estimated 31,000 unsold companies that it cannot unload at the prices it needs. It needs a new pool of capital. Workers’ 401(k)s, nearly $14 trillion in total across all retirement accounts, are that pool.

Private credit funds are in more immediate trouble. These funds lend money to non-publicly traded companies, including many software firms. As artificial intelligence tools have begun threatening the business models of those firms, investors have grown nervous that the loans may not be repaid.

Private equity made its bets. Now they want us to share the risk with them.

What the Rule Actually Changes

For more than 30 years, I managed 401(k) plans. I took that responsibility seriously. I reviewed investments carefully, paid close attention to fees, and understood that the people whose retirement savings I was overseeing were counting on me to act in their interest, no one else’s.

This rule changes that calculus for every employer that sponsors a retirement plan. It makes it easier to include private equity, private credit, and cryptocurrency in workers’ 401(k) options. It also makes it harder for employees to sue their employers if those investments fail.

Speaking Up to Protect Workers’ Retirement Savings

There is no congressional debate on this rule. No public hearings. No vote. This is being done through executive action, with no requirement that anyone in Congress weigh in. Most of the news coverage has been minimal.

Eileen Appelbaum, Co-Director of the Center for Economic and Policy Research and one of the country’s leading experts on private equity, put it directly: “It is much more risky for an ordinary worker who relies on his or her 401(k) for a dignified retirement to have retirement savings in opaque, highly illiquid assets like private equity and private credit funds. These are not suitable investments to be included in 401(k)s.”

Senator Elizabeth Warren, the Ranking Member of the Senate Banking Committee, called this “another Trump giveaway to the billionaires on the backs of working people.” She has called on anyone who cares about working people’s financial security to oppose the rule. The comment period is open. That is the mechanism for doing exactly that.

What You Can Do

Comment. Financial analysts and other experts are likely to weigh in on this rule. But your voice matters too. Personal comments from workers are impactful, and even if you do not have an employer-sponsored plan, if you object to the government repeatedly tilting the rules in Wall Street’s favor, your voice belongs in this record. The comment period is open now. Information on submitting comments and a draft template can be found here.

Signal. If you have an employer-sponsored retirement plan, let your HR or benefits administrator know you are aware of this proposed rule. Ask to be kept informed if your plan ever considers adding these kinds of investments. Nothing is changing yet, but plan administrators who are already skeptical will feel the difference between employees who are paying attention and those who aren’t.

The Trump administration is democratizing the financial risk that Wall Street created and no longer wants to carry alone. Workers didn’t create this mess. We shouldn’t be asked to absorb it.

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