In a recent interview, Kutak Rock partner and head of the firm’s national employee benefits and executive compensation group, John Schembari, discussed the growing interest in alternative investments such as private equity, hedge funds, real estate and cryptocurrency and what their potential inclusion in 401(k) plans could mean for plan sponsors and fiduciaries in 2026. As of January 2026, the retirement industry is awaiting guidance from the U.S. Department of Labor, expected in early February, following a 2025 directive instructing the agency to clarify how fiduciaries can responsibly evaluate alternative investments in defined contribution plans. The guidance should provide plan sponsors with a clearer framework for managing fiduciary considerations in this evolving area.

John noted that interest among plan sponsors and participants is strong, fueled by widespread media attention and the fact that alternative investments are already common in pension plans, endowments and foundations. At the same time, he emphasized the importance of proceeding cautiously. Alternative investments are not an area where sponsors necessarily want to be early adopters, and fiduciaries should be mindful of existing cautionary tales as they evaluate whether and how these options could fit within their defined contribution plans.

Looking ahead, John explained that alternative investments are most likely to be introduced initially through managed accounts or as a component of target date funds, where another professional fiduciary can provide an added layer of oversight. He does not expect alternative investments or cryptocurrency to appear as standalone options on 401(k) investment menus in the near term. He concluded by emphasizing the importance of documentation, reminding fiduciaries that carefully recording their analysis and decision-making process will be essential if plan decisions are challenged years down the road.

Full Interview here.

John leads the firm’s national employee benefits and executive compensation group and focuses his practice primarily on minimizing his clients’ legal risks while ensuring that their employee benefits and executive compensation programs align with their goals. He works with private, public and governmental employers on qualified and nonqualified retirement plans, employee stock ownership plans, insured and self-funded health plans, and executive and incentive compensation programs. He advises compensation committees, ERISA fiduciaries, in-house counsel, and finance and human resources executives from companies of all sizes, including several of the largest employers in the U.S.