The Department of Labor proposed new rules for how fiduciaries select investments for your 401(k). We’re here to break down what this could mean for your retirement savings. There's been a lot of buzz lately about new rules for 401(k) plans. If you're wondering what it all means for your retirement account, we’re here to break things down.
In March, the U.S. Department of Labor (DOL) proposed a new rule implementing the Trump administration’s executive order “to democratize access to alternative assets in 401(k) plans.”
Instead of focusing on a specific investment type, the new rule would change how investments get evaluated, not which investments your plan must offer. Think of it less as "your 401(k) is about to look wildly different" and more as "the rulebook for how investments get picked just got clearer."
The proposed rule lays out how fiduciaries should choose investments, across six metrics: performance, fees, liquidity, valuation, benchmarking, and complexity.
Here's the good news: Betterment’s investment process is built around the same factors the DOL identifies. We evaluate risk-adjusted performance, prioritize low-cost ETFs with transparent valuations and readily available benchmarks, stress-test portfolio strategies, and automatically monitor portfolios and rebalance as participants approach their investment time horizons. We apply this disciplined process to every investment decision we make.
Betterment will continue to carefully consider all types of investments, rigorously select and monitor options as a fiduciary, while preserving the flexibility participants desire.
That same disciplined process also shapes what we don't offer. Weighed against factors like fees, liquidity, and complexity, we will continue not to offer alternative investments such as crypto and private assets. We’ll continue to regularly review investments with appropriate oversight and governance to meet our due diligence and fiduciary duty in selecting investments suitable for participants' long-term investment objectives.
The proposed rule is open for comment until June 1, 2026, with a final rule expected later in the year. Clearer rules are good for everyone: They give fiduciaries the confidence to act, encourage competition among service providers, and ultimately mean better options and lower costs for participants saving for retirement. As always, we will continue to monitor ongoing developments and keep you informed as the landscape evolves.