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The USA are about to open up to new assets in 401(k): private equity, real estate funds, and cryptocurrencies. The executive order proposal provides for more diversification, but also increasing risk and complexity. Revolution in US Pension Plans: The Possible Boom of Alternative Investments in 401(k) In the United States, a significant reform of 401(k) pension plans is being prepared. An executive order signed by President Donald Trump, expected in the first half of 2025, aims to open the possibility of including alternative instruments such as private equity, real estate, and cryptocurrencies within these plans. This initiative could substantially change the management of retirement savings, offering Americans broader access to different asset categories. The stated goal is to increase the opportunities for returns and diversification for millions of 401(k) participants. According to the data collected by Investment Company Institute, the market of US retirement plans, which has over 12.5 trillion dollars under management, represents a very large pool for the application of this new investment strategy. The formal inclusion of alternative investments in 401(k) plans stems from a revision of the regulations of the https://www.dol.gov/general/topic/retirement/erisa, implemented by the Department of Labor. This update follows specific guidelines from the presidency, with the intent to modernize the discipline. Consequently, participants might access, through corporate pension funds, investment vehicles previously typical of institutional investors. Pension managers and advisors will be required to propose more articulated strategies, evaluating not only the potential returns but also the intrinsic risks of such instruments. Industry analysts observe that the increase in management complexity will require specific preparation from financial advisors and careful communication to investors. Which alternative assets might be available in pension plans? The expansion proposal includes various asset classes aimed at promoting growth and diversification, including the following: Private equity: investments in non-listed companies, generally…

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Filed under: News - @ August 7, 2025 5:33 pm