US lawmakers ask SEC to open 401k retirement plans to crypto
U.S. lawmakers are asking the Securities and Exchange Commission (SEC) to implement President Donald Trump’s executive order opening 401k retirement plans to cryptocurrency. Trump had signed this executive order in August.
The executive order allows alternative assets like private equity, cryptocurrencies and real estate into workplace retirement plans, and seeks to “relieve the regulatory burdens and litigation risk” to allow employers that sponsor retirement plans to “apply their best judgment in offering investment opportunities to relevant plan participants.” Previous reports had already noted that Trump was planning to introduce cryptocurrency among other assets to retirement plans.
READ: Trump signs executive order opening 401(k) to alternative assets (
Members of the Financial Services Committee praised Trump’s executive order in a letter encouraging the SEC to implement it. “We encourage the SEC to provide swift assistance to the Secretary of Labor and to make any necessary revisions to its current regulations and guidance,” the letter reads. “We also request the SEC review bipartisan legislation being advanced in the 119th Congress concerning accredited investors. We are hopeful that such actions will help the 90 million Americans who are currently restricted from investing in alternative assets to secure a dignified, comfortable retirement.”
The executive order calls for the Labor Department to “reexamine” its “past and present guidance regarding a fiduciary’s duties under the Employee Retirement Income Security Act of 1974.” The DOL must “clarify” its position on alternative assets – which also include real estate, commodities and digital assets – and “identify the criteria that fiduciaries should use to prudently balance potentially higher expenses against the objectives of seeking greater long-term net returns and broader diversification of investments.” The order also tells the Securities and Exchange Commission (SEC) to make it easier for participants in workplace plans to gain access to alternative assets.
READ: ‘Golden Age of Crypto’: Trump appoints new group to promote digital finance (
This move follows the reversal of the Labor Department’s anti-crypto guidance in May, which had cautioned fiduciaries to be extremely careful when including crypto in retirement funds.
“Every American preparing for retirement should have access to funds that include investments in alternative assets when the relevant plan fiduciary determines that such access provides an appropriate opportunity… to enhance the net risk-adjusted returns,” said the lawmakers, who include Frank D. Lucas, Warren Davidson, Marlin Stutzman, Andrew R. Garbarino, Michael V. Lawler, Troy Downing and Mike Haridopolos, as well as House Financial Services Committee Chairman French Hill and Subcommittee on Capital Markets Chairman Ann Wagner.
Trump has been going big on digital finance and cryptocurrency. Earlier this year, Trump had appointed a group to promote digital finance, with the aim of ushering in “a golden age of crypto.”