2020 DOL Guidance on Private Equity in 401(k)s Praised for Expanding Investment Access

A recent social media post by user Rothmus 🏴 on November 20, 2025, lauded a past action by President Trump, claiming it addressed the issue of 90 million Americans being "barred from investing where the strongest gains were made" in their 401(k) retirement accounts. The tweet specifically called the move "great," highlighting a perceived expansion of investment opportunities for retirement savers. This sentiment reflects ongoing discussions surrounding the accessibility of alternative assets within employer-sponsored retirement plans. The commentary likely refers to the Department of Labor's (DOL) Information Letter 2020-03, issued on June 3, 2020, during the Trump administration. This guidance clarified that 401(k) plan fiduciaries would not inherently violate their duties under the Employee Retirement Income Security Act of 1974 (ERISA) by offering private equity investments. Such investments would typically be included within a professionally managed, diversified asset allocation fund, such as a target-date fund, rather than as standalone options. Prior to this guidance, many retirement plans shied away from including private equity due to perceived regulatory uncertainty and the complex nature of these assets. The 2020 letter aimed to provide clarity, potentially opening the door for millions of Americans to indirectly access private equity through their retirement savings. This move was seen by some as a way to allow 401(k) participants to tap into asset classes historically reserved for institutional investors, which often promise higher returns. However, the DOL also cautioned that plan fiduciaries must uphold their duties of prudence and loyalty, conducting thorough evaluations of private equity investments' risks and benefits. While private equity can offer diversification and potentially higher returns, it also comes with increased illiquidity and complexity compared to traditional public market investments. The debate continues regarding the appropriate balance between investment access and fiduciary protection for retirement savers. The tweet's perspective underscores a persistent desire among some investors for broader access to diverse asset classes within their retirement portfolios. While the 2020 guidance addressed private equity, the DOL has subsequently issued warnings regarding other alternative investments like cryptocurrency in 401(k)s, emphasizing the need for extreme caution due to their volatility and speculative nature. The landscape of 401(k) investment options remains a dynamic area of regulatory and market interest.