White House Weighs Directive to Bring Private Equity to 401(k)s

Advisers to President Donald Trump are considering a new directive to pave the way for private equity to become a bigger piece of US retirement savings, according to people familiar with the matter.

Top officials have been discussing an executive order or presidential memo on the topic, the people said, asking not to be identified as the deliberations are private. The goal is to ease the legal concerns that have kept private equity from most worker 401(k)s for years.

National Economic Council officials and Susie Wiles, Trump’s chief of staff, have been involved in the preliminary conversations, some of the people said. The discussions are still early and plans could change.

A White House spokesperson declined to comment. The Financial Times reported on the deliberations earlier Wednesday.

A directive would be the clearest sign that the Trump administration agrees that private equity is suitable for regular savers. Most retirement portfolios are concentrated in stocks and bonds in part because corporate plan overseers are reluctant to venture into illiquid and complex products like buyout funds or private credit.

Opening 401(k)s to private markets products would offer savers more investment options and, proponents argue, greater potential upside. But with that comes greater risk and higher fees that may leave retirement plan administrators vulnerable to lawsuits.

Read More: Private Equity Covets New Golden Age in $12 Trillion of 401(k)s

A White House directive would serve as a green light to private asset managers to compete for some $12.5 trillion in 401(k)-type plans. With US pensions and cash-starved endowments tapped out, private equity firms have been lobbying hard for rules to help companies to include private equity in worker 401(k)s.

Money managers have pitched policymakers on the argument that savers’ portfolios don’t reflect changes in finance as public markets shrink. The number of publicly traded US firms has greatly declined since a peak in the 1990s, while private equity assets more than doubled in the decade ended 2023. Firms like Blackstone Inc. have already been working for years to gather more money from rich individuals like dentists and lawyers.

On Monday, Securities and Exchange Commission Chair Paul Atkins said the agency will revisit rules that limit which individuals can invest in funds that go into private equity.

“This common-sense approach will give all investors the ability to seek exposure to a growing and important asset class, while still providing the investor protections afforded to registered funds,” Atkins said.

In 2020, Trump’s Labor Department said retirement plan overseers wouldn’t be violating responsibilities if they included private equity as a component of a portfolio. But President Joe Biden’s Labor Department issued another letter warning that some plans might not have the expertise to make such a decision. Buyout firm Partners Group is lobbying government officials to reaffirm the first Trump administration’s stance.

A directive from the executive branch on 401(k)s could spur the Labor Department to move faster.

--With assistance from Jennifer A. Dlouhy.

To contact the reporters on this story:
Dawn Lim in New York at dlim308@bloomberg.net;
Allison McNeely in New York at amcneely@bloomberg.net;
Silla Brush in New York at sbrush@bloomberg.net

To contact the editors responsible for this story:
Jeremy Hill at jhill273@bloomberg.net

Erin Fuchs

© 2025 Bloomberg L.P. All rights reserved. Used with permission.