Labor Department Proposes 6-Factor Shield Against 401(k) Lawsuits as Trump Pushes Alternative Assets
Updated
Updated · ProPublica · Aug 27
Labor Department Proposes 6-Factor Shield Against 401(k) Lawsuits as Trump Pushes Alternative Assets
3 articles · Updated · ProPublica · Aug 27
Summary
Employers that document six factors when selecting 401(k) investments would get more deference in court under a Labor Department proposal expected to be finalized this year, making worker lawsuits over plan oversight harder to win.
The rule is meant to lower litigation risk and clear the way for broader use of private equity, real estate and cryptocurrency in retirement plans, though supporters say it creates a framework rather than a mandate.
Critics say the change could weaken fiduciary protections for savers; a 2025 AARP survey cited by opponents found most Americans do not view access to private markets or crypto in retirement accounts as important.
Fees remain a central risk for workers regardless of the rule: the Labor Department says an extra 1% in annual fees can cut retirement savings by 28%, while experts call expense ratios above 1% a red flag.