Small Business Guide to New 401(k) Alternative Asset Rules

New 401(k) Alternative Asset Rules: What Small Businesses Should Know (and How to Stay Compliant)

The federal government recently announced a major shift in retirement investing: 401(k) plans can now include certain alternative assets, such as private equity, private credit, hedge funds, and real estate funds.

While much of the conversation has focused on large corporations, this change could also affect small business owners, especially those offering 401(k) plans to employees or planning to launch one.

At Exact Bookkeepers, we help small business owners stay financially organized and compliant during changes like this. Here’s what you need to know.

1. Alternative Assets Could Make Your Benefits More Competitive

If you’re competing for top talent, a more diversified 401(k) could help set your benefits apart. Offering alternative investments may appeal to employees seeking broader investment options, especially higher-income earners.

But with added complexity comes the need for precise tracking and reporting, a service we provide to keep your retirement plan records accurate and year-end ready.

2. These Investments Come With Higher Risk and Oversight

Alternative assets can carry higher fees, more volatility, and less liquidity than traditional investments. As a plan sponsor, you have a fiduciary duty to act in the best interest of your employees, which means careful vetting and clear communication about risks.

Exact can work alongside your retirement plan advisor to ensure every cost, fee, and return is clearly documented in your financial records.

3. Administration Will Likely Become More Complex

Adding alternative investments may mean new reporting formats, additional vendor coordination, and more detailed reconciliations. Without a strong bookkeeping system, it’s easy to lose track of plan-related expenses or misclassify transactions.

We help keep your books organized so your retirement plan remains compliant and your financials are always ready for review.

Final Thought: The Rule Change is an Opportunity—If Managed Carefully

For small businesses, these new 401(k) options can enhance employee benefits, but they also increase the need for accurate, compliant financial management.

If you’re considering expanding your 401(k) offerings to include alternative assets, Exact Bookkeepers can help you track costs, maintain compliance, and ensure your plan is financially sound from day one.