In the United States, a significant number of individuals contribute to employer-sponsored defined-contribution pension plans, commonly known as 401K accounts. However, not all participants have the opportunity to invest in alternative assets, either directly or through their retirement plans. These alternative assets can encompass private market investments, such as private equity or private debt, as well as real estate, infrastructure, commodities, or actively managed funds that include digital assets.
On August 7, 2025, President Donald Trump issued an executive order aimed at easing regulatory constraints and reducing litigation risks that hinder American workers’ retirement accounts from achieving competitive returns and asset diversification. This initiative is intended to help secure a dignified and comfortable retirement for Americans.
The order mandates the US labour secretary to reassess the Department of Labour’s guidance concerning fiduciary responsibilities under the Employee Retirement Income Security Act of 1974 (ERISA). The goal is to facilitate the inclusion of alternative assets in asset allocation funds for retirement plans. Additionally, the labour secretary is tasked with clarifying the Department’s stance on alternative assets and the fiduciary processes required for offering such investments under ERISA.
Luxembourg, known as a key jurisdiction for establishing private equity and venture capital funds, might consider adopting similar measures. There is a suggestion that European governments should take inspiration from this move, as private equity can provide substantial returns for pension savings, potentially enhancing retirement income and alleviating future government budgetary pressures, particularly in Luxembourg. The prospect of pension reform has been a topic of interest for the Luxembourg government, as indicated by discussions involving the health and social security minister in early July.
