Trump-Era Rule Pushes Riskier 401(k) Investments Under Fiduciary “Safe Harbor”

On March 30, 2026, the Department of Labor’s Employee Benefits Security Administration unveiled a proposed rule that could dramatically alter how fiduciaries manage 401(k) retirement plans. The rule aims to create a “safe harbor” that would shield fiduciaries from liability when selecting designated investment alternatives, including riskier and less transparent assets.

This regulatory shift implements Section 3(c) of President Donald Trump’s Executive Order 14330, titled “Democratizing Access to Alternative Assets for 401(k) Investors.” While the administration frames this as expanding investment options for everyday workers, critics warn it opens the door for fiduciaries to prioritize high-fee, complex alternative investments that may not serve the best interests of plan participants.

The Employee Benefits Security Administration’s proposal comes with guidance materials, including a slide deck prepared by law firm McGuireWoods. These resources are designed to help fiduciaries navigate the new safe harbor provisions and justify their investment selections to management and business partners.

Under current rules, fiduciaries must meet a strict duty of prudence, carefully vetting investment options to protect participants’ retirement savings. The new rule, however, lowers this bar by providing a legal shield for fiduciaries who choose designated alternatives, potentially encouraging riskier bets without adequate oversight.

This move fits a broader pattern of the Trump administration’s executive orders that bypass Congress and erode regulatory safeguards, often under the pretense of expanding consumer choice or reducing red tape. In reality, these policies frequently benefit financial industry insiders at the expense of ordinary Americans’ financial security.

For retirement savers, this proposed rule raises urgent questions: Will your 401(k) be steered toward investments you don’t understand and can’t easily get out of? Will fiduciaries prioritize flashy alternative assets over stable, low-cost options that better protect your nest egg?

The Department of Labor is currently accepting comments on the proposal. It is critical that advocates and plan participants weigh in to demand transparency, accountability, and protections that truly put workers first — not Wall Street profits.

For more information or to access the McGuireWoods slide deck, fiduciaries and interested parties can contact their Employee Benefits Practice Group directly. But don’t be fooled: this “safe harbor” rule is another step in the Trump administration’s ongoing campaign to undermine protections and expose Americans to unnecessary financial risk.