Most Americans don’t look to their 401(k) plans for excitement or experimentation, instead relying on the promise that steady saving and sober planning will guarantee security in their golden years. But the Trump administration wants to transform the well-worn patterns of retirement investing.

To do so, it is moving to weaken the main protection workers have over their retirement money. The man in charge of the regulatory rollback is an industry insider whose former clients are among the large companies likely to benefit from his plan.

Since taking office last year, President Donald Trump has loudly called for plans to include less-regulated — and often risky — investments like private equity and cryptocurrency. To achieve that goal, the administration is softening one of the strongest legal protections American workers have: the right to hold an employer accountable when retirement savings are mishandled. The change is designed to give employers cover if their workers’ 401(k)s are deflated by expensive, opaque or unproven investments.

Broad adoption of alternative assets is indeed the administration’s goal. One of the most consequential parts of a 401(k) plan is the default option, since most workers simply leave their money there. Usually, the default is a target date fund, which, based on the investor’s target date of retirement, gradually shifts its composition as that date approaches from mostly publicly traded stocks to mostly bonds, becoming more conservative and less risky as the person gets closer to needing the money. Target date funds haven’t changed much over the past two decades as they’ve soared in popularity. They offer all-in-one simplicity and, since they are often passive, low cost. Adding complex investments like private equity or hedge funds as a standard part of the mix would be a sea change. 

The proposed rule professes to be “neutral” as to what effect the new, lax standard will have on investments, but it confidently predicts that companies will include more alternative assets over time in 401(k)s. That, after all, is the point of the rule, to broaden access to “the potential growth and diversification opportunities associated with alternative asset investments,” as Trump’s executive order put it. After the rule is finalized, plans covering about 5 million participants will add new or modified target date funds that include alternative investments, according to the proposal, and the number will continue to grow every year.

But the Trump administration wants to transform the well-worn patterns of retirement investing. To do so, it is moving to weaken the main protection workers have over their retirement money. The man in charge of the regulatory rollback is an industry insider whose former clients are among the large companies likely to benefit from his plan.

Since taking office last year, President Donald Trump has loudly called for plans to include less-regulated — and often risky — investments like private equity and cryptocurrency. To achieve that goal, the administration is softening one of the strongest legal protections American workers have: the right to hold an employer accountable when retirement savings are mishandled. The change is designed to give employers cover if their workers’ 401(k)s are deflated by expensive, opaque or unproven investments.