// Fintech

Source: Semafor

The Labor Department’s new rule reduces fiduciary liability for employers adding private credit, digital assets, and other alternatives to 401(k)s—a move that green-lights a new revenue stream for asset managers while transferring risk assessment burden from employers to individual workers. This arrives as private credit markets face headwinds, suggesting the rule may be designed to support illiquid alternative investments rather than reflect genuine worker demand. The timing shows a regulatory choice to prioritize capital formation and employer optionality over the traditional fiduciary standard that once centered worker protection.

Source: Morning Brew

The Department of Labor’s proposed rule would allow retirement plan administrators to allocate 401(k) assets into private equity and credit funds—moving ordinary workers’ retirement capital from public markets into illiquid, higher-risk alternative investments typically reserved for institutional investors and the wealthy. Plan sponsors gain fee revenue and investment managers access trillions in fresh capital, while individual workers lose liquidity, transparency, and the ability to exit when conditions deteriorate. The mechanism is straightforward: companies get regulatory permission to bundle risky assets into their retirement plans, workers can’t easily sell, and if a portfolio of private credit or PE-backed carwashes underperforms, it’s their nest egg that shrinks.