The DOL's 401(k) Rule Gets the Goals Right but the Guardrails Wrong

By Ian Ayres and Quinn Curtis The Department of Labor’s new proposed changes to 401(k) plan regulations, framed by the Trump administration as democratizing retirement investment options for everyday Americans, instead reads as though its primary aim is to benefit the financial advisory industry. Last August, President Trump signed an executive order calling on the Department of Labor to make it easier for employers to offer alternative investments – private equity, hedge funds, real estate, and the like – in the 401(k) plans that more than 90 million Americans rely on for retirement. Last week, the DOL responded with a proposed rule, which it frames as a "safe harbor" checklist of steps that, if followed, would shield employers from liability when they add these options to their plans. Responsibly broadening access to alternative assets can usefully improve portfolio diversification. But the proposed rule is too deferential to employers who retain professional advisers and fails to…