DEMOCRATIZING ACCESS TO TONTINES
EO: DEMOCRATIZING ACCESS TO ALTERNATIVE ASSETS FOR 401(K) INVESTORS
You weren’t imagining it—there is an Executive Order (EO), signed on 7 August 2025, and it explicitly name-checks “lifetime income investment strategies, including longevity risk-sharing pools.” That’s the wording in Section 3(a)(vi) of the EO itself. (The White House)
What just happened (and why it’s unusual)
EO signed (7 Aug 2025): “Democratizing Access to Alternative Assets for 401(k) Investors.” It directs the Department of Labor (DOL) to re-examine guidance and within 180 days propose rules/safe harbours for asset-allocation funds that include alternative assets; it also tells the SEC to facilitate access (and review accredited/qualified purchaser rules) and asks DOL to coordinate with Treasury.
The lifetime income twist: The EO’s definition of “alternative assets” includes “lifetime income investment strategies, including longevity risk-sharing pools.” That’s the first time I’ve seen US federal action explicitly nod to tontine-style pooling in the 401(k) context.
DOL reaction: EBSA publicly applauded the order and highlighted the plan to clarify fiduciary processes and to prioritise steps that curb ERISA litigation. (DOL)
Context from practitioners: Multiple law-firm summaries confirm the 180-day timetable and the explicit inclusion of longevity pools alongside private equity, real estate, commodities and (via actively-managed vehicles) digital assets. (Ropes & Gray, Morgan Lewis)
What this could mean for tontine/CDC-style pooling in 401(k)s
Regulatory path now exists: The EO invites DOL/SEC/Treasury to build safe harbours and a fiduciary process for offering funds that contain alternative assets—including longevity pooling—inside target-date or other asset-allocation vehicles. If DOL hits the 180-day mark, we’d expect proposals by early February 2026, with implementation following standard notice-and-comment.
Likely product architecture: The near-term, ERISA-friendly route is a collective investment trust (CIT) or TDF with (i) a bond-ladder sleeve delivering predictable cash-flows and (ii) a longevity-sharing overlay that redistributes the balances of deceased members to survivors—boosting income for those who live longer—without guarantees from an insurer. In my world, this is the Fair Transfer Plan layered over the cash-flow engine, and it’s exactly the kind of transparent, open-ended, heterogeneous pool I favour.
What DOL/SEC need to clarify:
How a longevity-pool fund fits with ERISA 404(c)/QDIA frameworks for daily-valued menus. Ropes & Gray
Disclosure and participant-communication standards (variable income; redistribution mechanics).
Tax points with Treasury/IRS (e.g., RMD interactions and treatment of reallocated balances). Eversheds Sutherland
Treatment under accredited/qualified purchaser rules when exposure flows through a plan-level fund. Morgan Lewis
So… will 2026 be the year of the tontine?
Plausible for first movers; mainstream probably 2027+. Here’s a realistic read:
If DOL publishes proposed guidance/safe harbours by Feb 2026, a handful of large sponsors/record-keepers could pilot TDF-plus-pool designs in late 2026, especially in custom/white-label CITs where governance teams are comfortable.
Broader adoption usually follows the plan-year cycle and vendor RFP timetables, so widespread menu presence feels more like 2027–2028—but the door is now clearly open.
What to watch next
DOL’s 180-day deliverables (rescission/revision of prior private-equity statements, proposed safe harbours, litigation-risk curbs).
SEC moves on accredited/qualified purchaser thresholds as applied to DC plans.
Early product filings from TDF/CIT providers that pair a bond-ladder with an open-ended longevity pool (the “Fair Transfer Plan over a ladder” blueprint).
If you want the technical underpinnings (fairness rules, payout maths, pool stability), I can walk through the Fair Transfer Plan mechanics and show how a laddered portfolio funds the cash-flows whilst the pool supplies the longevity uplift- with complete transparency and no insurer balance sheet - join as a “Founder Member” to book my time for a one-on-one meeting.
I’m trying to build a bit of momentum around modern tontines as a practical fix for the retirement-income gap. If you’re game, please get others to join my Substack (remember it’s a campaign as much as a blog; contributions are optional, but subscribers get priority access to tools like the gilt-ladder hedge app and the TDF modelling app):
I'm ex-Ignis, now Avrox and part-time senior DB research consultant at Hymans Robertson—I've been pushing exactly the kind of open-ended, heterogeneous pooling the EO now implicitly enables.
Note to self. Do more US-based content…
Seems to me this EO is quite something from a retirement perspective. Other thoughts?