Donald Trump Weighs Order to Open U.S. Retirement Programs to Private Equity

The Trump administration is considering a sweeping executive order that could grant private equity firms access to the U.S. retirement savings market—specifically 401(k) plans—worth nearly $9 trillion. This move could reshape the way millions of Americans invest for retirement while offering private capital a long-coveted funding source.

The Executive Order in Discussion

According to four individuals familiar with the matter, the potential order would direct agencies including the Department of Labor, the Treasury Department, and the Securities and Exchange Commission (SEC) to explore the feasibility of opening 401(k) retirement plans to private equity funds. These funds typically focus on leveraged buyouts, real estate, and other complex transactions.

During his first term, Donald Trump took initial steps to enable private equity access to retirement plans, but implementation stalled due to liability concerns. The proposed executive order could provide legal clarity and protection, encouraging fund managers to embrace private investments in retirement portfolios.

Industry Reaction and Implications

Top private equity executives estimate that their products could attract hundreds of billions of dollars in new assets if made available through 401(k) plans. Firms like Blackstone, Apollo, and KKR have long eyed this untapped market.

Although no final decision has been made, and the White House declined to comment, the initiative has already prompted regulatory attention. SEC Chairman Paul Atkins stated this week that the agency would “revisit” existing restrictions that limit certain funds from holding more than 15% of assets in private investments, aiming to balance broader access with investor protections.

Risks and Rewards of Private Equity in Retirement Plans

Currently, most American workers invest their retirement savings through traditional vehicles like stocks, bonds, and mutual funds. Private equity, by contrast, remains less accessible, largely due to its illiquidity, complex valuation, and higher fee structure.

Critics warn that allowing more private assets into retirement plans could expose savers to greater risk. However, advocates—including Apollo’s CEO Marc Rowan—argue that private equity’s long-term, illiquid nature aligns with retirement objectives, potentially delivering superior returns over decades.

Regulatory Momentum and Industry Partnerships

In the final months of Trump’s first term, the Department of Labor issued guidance permitting private equity allocations in some long-term retirement target-date funds. Despite this regulatory shift, asset managers were slow to adopt the policy due to fears of legal liability under fiduciary duty laws.

However, insiders suggest that further policy directions from federal agencies—or legislative support from Congress—could offer the reassurance needed for broader adoption.

Leading private equity firms have already begun forming alliances with trusted asset managers. Blackstone, Apollo, and KKR have recently partnered with Vanguard, Capital Group, and State Street to bring private market investments to retail retirement savers. Last week, Empower—one of the largest 401(k) providers in the U.S.—announced it would begin offering funds from Apollo, Partners Group, Goldman Sachs, and others to plan participants.

Conclusion

As Donald Trump weighs a new executive order, the U.S. retirement landscape could face significant transformation. If enacted, the move may bridge the gap between Wall Street’s private capital giants and Main Street’s retirement savers—ushering in both opportunities and heightened scrutiny.

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