Dive Brief:
- U.S. Rep. Troy Downing, R-Mont., introduced a bill Tuesday that would codify an executive order by President Donald Trump to reduce regulatory barriers to allow investments in private equity, real estate and cryptocurrency in 401(k) retirement plans.
- The Retirement Investment Choice Act is meant to “democratiz[e] access to alternative investments for 401(k) investors,” according to a Downing press release.
- “Alternative investments hold the transformative potential to supercharge the financial security of countless Americans saving for retirement,” Downing said in a statement. “I applaud President Trump for his leadership to democratize finance and am proud to be leading the effort in Congress to codify his EO and enshrine this move for generations to come.”
Dive Insight:
Trump’s Aug. 7 executive order called for the U.S. Department of Labor to reevaluate guidance on these investments and for the U.S. Securities and Exchange Commission to revise applicable regulations and guidance.
In May, DOL’s Employee Benefits Security Administration rescinded a Biden-era warning that cautioned 401(k) plan fiduciaries against offering cryptocurrency options. The 2022 guidance urged fiduciaries to exercise “extreme care” before adding cryptocurrency to their investment menus.
DOL in the spring said its decision to rescind the guidance “reaffirms its neutral stance” on whether fiduciaries include cryptocurrency in a plan’s investment menu.
In its 2022 guidance, Biden’s DOL cautioned about the risks to participants’ retirement accounts that cryptocurrency could pose, including fraud, theft and loss, and characterized those investment options as speculative and volatile.
The American Securities Association expressed support for Downing’s bill to codify Trump’s EO, which ASA President and CEO Chris Iacovella said would “expand investment opportunities for every American retirement saver and retiree.”