Since the early 2000s, employers have paid tens of millions of dollars at a time to settle lawsuits related to the Employee Retirement Income Security Act (ERISA). For example, $62 million at Lockheed Martin and over $50 million at Boeing, with many others stacking up across the industry. If you’ve spent any time in the retirement plan sector, you’ve likely seen the headlines and felt the pressure. Excessive fee lawsuits. Underperformance claims. Plan fiduciaries second-guessed with the benefit of hindsight. These weren’t just headlines. These claims fundamentally changed how fiduciaries approach risk.
At a recent conference, our team heard directly from Daniel Aronowitz, Assistant Secretary of Labor and head of the Employee Benefits Security Administration (EBSA). Aronowitz warned of “abusive litigation,” the “weaponization of ERISA,” and a growing “fear factor” for fiduciaries, calling some claims “fantasy tales that would make Harry Potter cringe.”
Building on that theme, Assistant Secretary Aronowitz has repeatedly characterized these cases as “frivolous lawsuits” and, at times, even referred to them as symptomatic of a broader systemic issue. As a result, the buzz around alternatives has surged over the past five years, ultimately leading to President Trump’s Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors,” signed on August 7, 2025.
What are alternative assets under Executive Order 14330?
While many in the industry have simplified “alternative assets” to mean private investments or cryptocurrencies, the reality is far broader. The Executive Order contemplates a full spectrum of assets, including private markets (equity and debt), real estate, digital assets, commodities, infrastructure projects, and even lifetime income strategies, further reinforcing that this conversation extends well beyond a narrow subset of investments.
What does “Democratizing Access to Alternative Assets for 401(k) Investors” mean?
At its core, the Executive Order directs the Department of Labor (DOL), specifically through Mr. Aronowitz’s Employee Benefits Security Administration (EBSA), alongside the Securities and Exchange Commission (SEC), to reexamine whether asset classes commonly used by institutional and accredited investors can be prudently incorporated into workplace retirement plans like 401(k)s and 403(b)s, and if doing so would improve outcomes for the everyday American worker who participates in them.
Assistant Secretary Aronowitz and his team responded not with commentary or conjecture, but with a rule centered on a prudent, repeatable process — the lifeblood of fiduciary governance. As Aronowitz told the audience, “ERISA is a law of process, not results.” Despite the headlines, EBSA’s proposed rule doesn’t tell plan sponsors to add private equity or any other alternative investment, for that matter. Instead, it gives fiduciaries something they’ve been missing: a clear, defensible framework for making the decision.
That framework centers around six factors:
- Performance (with a focus on risk-adjusted outcomes)
- Fees (in context, not isolation)
- Liquidity (both plan-level and participant-level)
- Valuation (independent and reliable)
- Benchmarking (apples-to-apples comparisons)
- Complexity (understand it or bring in someone who does)
Overlaying all of it is a required approach, which the Assistant Secretary describes as “OTA: Objective. Thorough. Analytical.”
In other words, this isn’t about chasing returns. It’s about documenting why a decision makes sense. The goal is not to eliminate lawsuits since there are bad actors out there, but rather to reduce the fear that has kept fiduciaries from acting with confidence in fulfilling their duty.
For years, defined contribution plans have largely avoided alternatives because the litigation risk outweighed the perceived benefit. The Department of Labor, through Assistant Secretary Aronowitz and his team at EBSA, is now working to rebalance that equation by reinforcing what ERISA has always required: a prudent, well-documented process. The proposed rule doesn’t eliminate litigation, but it does signal a shift that may make it harder for claims based purely on hindsight to gain traction. And in today’s environment, that’s a meaningful change.
What should plan sponsors know about Executive Order 14330?
To plan sponsors reading this: this proposal does not mean you should add alternative investments to your plan. Nor does it mean you should dismiss alternative investments. It means that if you choose to evaluate them, you now have a clearer way to do so and potentially defend that decision.
So, ask yourself: Do I have an investment evaluation process in place today? And is it supported by individuals with the appropriate expertise?
If not, that is the work. Build it into your plan oversight.
If you do and can execute and document against these six factors, then, as Assistant Secretary Aronowitz put it, you’re no longer limited to the salad bar. You’ve got access to the full buffet.
As of the date of this blog, this proposal remains just that — a proposal. It is currently in its comment period, and nothing here should be read as an endorsement of alternative investments in defined contribution plans.
What is worth reinforcing, however, is what this moment represents.
ERISA, with decades of applied wisdom, remains the gold standard of fiduciary conduct. There is nothing fundamentally new in this proposal; the principles of prudence, discipline, and process have always been there. What’s new is the clarity. EBSA has simply acknowledged that in today’s environment, one size does not need to fit all, so long as the basis of the investment election is a sound process.
For plan sponsors, that should be both grounding and empowering.
If you’re thinking about how this evolving landscape may impact your plan, or simply want to pressure-test your current process, we’re here to help.
Schedule time with one of our advisors to review your approach, evaluate your fiduciary framework, and ensure you’re positioned to make decisions with confidence, regardless of where this rule ultimately lands.
This article discusses a proposed Department of Labor rule that is subject to revision and has not been finalized. Regulatory requirements may change before any final rule becomes effective.
About the Author
Christian Stanley is a Partner and Senior Financial Advisor at Greenspring Advisors, where he works with organizations to design, implement, and oversee workplace retirement plans. He specializes in fiduciary governance, plan design, and executive compensation strategies, helping plan sponsors navigate complex regulatory environments with clarity and confidence.
Christian holds the Accredited Investment Fiduciary® (AIF®), Chartered Retirement Plan Specialist® (CRPS®), and Nonqualified Plan Consultant® (NQPC™) designations.
He is a member of the National Association of Plan Advisors (NAPA) Political Action Committee and Government Affairs Committee, and contributes to the American Retirement Association’s Legislative Relations Committee.
Sources:
- U.S. Department of Labor, Employee Benefits Security Administration.
“U.S. Department of Labor proposes landmark rule to democratize access to alternative investments in 401(k) plans.”
March 30, 2026. - U.S. Department of Labor.
“Fiduciary Duties in Selecting Designated Investment Alternatives” (Notice of Proposed Rulemaking).
Federal Register, March 31, 2026. - The White House.
Executive Order 14330: “Democratizing Access to Alternative Assets for 401(k) Investors.”
August 7, 2025. - Remarks from Daniel Aronowitz, Assistant Secretary of Labor (EBSA),
National Association of Plan Advisors (NAPA) Conference, 2026. - Selected ERISA litigation settlements:
- In re Lockheed Martin Corp. ERISA Litigation (Settlement: approximately $62 million)
- Boeing ERISA Litigation (Settlement: approximately $57 million)
