The U.S. Department of Labor has issued new guidance allowing certain lifetime income investment options to serve as default investments in 401k plans. The advisory opinion, released September 23, 2025, specifically approves the AllianceBernstein Lifetime Income Strategy program as a qualified default investment alternative under federal retirement law.

According to the department, the decision marks a change in federal retirement policy. The DOL had previously issued guidance in December 2021 that discouraged plan sponsors from including alternative investment options in 401k menus, but that guidance has now been rescinded.

“This Advisory Opinion provides much-needed clarity and certainty to stakeholders,” said Deputy Secretary Keith Sonderling in the DOL’s announcement. The department also indicated that it intends to issue additional proposed regulations to further outline fiduciary responsibilities when offering alternative asset investments to plan participants.

The opinion follows Executive Order 14330, which directed federal agencies to examine ways to expand access to alternative investments for 401k participants, including a review of fiduciary duties under the Employee Retirement Income Security Act.

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Qualified Default Investment Alternatives

Qualified default investment alternatives, or QDIAs, are investment options that employers can automatically enroll workers into when they don’t make their own investment selections. Federal law provides legal protections for employers who choose appropriate default investments that meet specific regulatory requirements.

Lifetime income investment options typically include insurance features designed to provide guaranteed income during retirement. These products often combine traditional investment growth with annuity-like protections, though they may involve higher fees compared with standard mutual funds or index funds.

The DOL’s opinion notes that plan sponsors are required to oversee the insurance companies offering lifetime income guarantees and to conduct ongoing due diligence to confirm that providers remain financially sound and continue meeting participant needs.

Impact on Business Owners and High Earners

Business owners who sponsor 401k plans now have expanded options for default investments, though the change also adds fiduciary responsibilities. Plan sponsors are expected to document their selection process and monitor the performance and stability of any lifetime income providers.

For high-earning professionals, the development could mean broader access to lifetime income products within workplace retirement plans. Analysts note that participants should review the features and costs of these products to understand how they differ from traditional investment options.

For self-employed individuals and business owners using Solo 401k plans, lifetime income products may also become available, though these plans do not require default investment selections and remain under the full control of the account holder.

Next Steps in the Rulemaking Process

The DOL indicated it plans to issue a notice of proposed rulemaking that will provide additional clarity on fiduciary duties related to alternative asset investments. According to the department, the proposed regulations may include safe harbor provisions that would give plan sponsors certain legal protections if they follow specified procedures.

Industry representatives have stated that lifetime income options could play a role in addressing retirement security challenges as Americans live longer and take on greater responsibility for funding their own retirements.

The advisory opinion applies specifically to the AllianceBernstein program but establishes principles that may apply to similar products if they meet comparable regulatory requirements and oversight standards.

Sources: Advisory Opinion 2025-04A — Lifetime Income Strategy as a QDIA (U.S. Department of Labor)