The US Department of Labor has submitted a final rule to the White House for review that would provide legal protection for employers adding crypto, private equity, and real estate to 401(k) plans. This regulation stems from a previous executive order and aims to establish a safe harbor for companies that evaluate assets based on six specific criteria: performance, fees, liquidity, valuation, benchmarks, and complexity.
According to data from the Investment Company Institute, 401(k) plans held $15 trillion in assets by the end of June. While the rule allows for these new asset classes, it does not mandate their inclusion. Employers retain full discretion over their plan offerings, and the regulation is intended to mitigate the threat of lawsuits that currently limit the investment choices available to participants.
The Office of Information and Regulatory Affairs has up to 90 days to complete its review of the proposal. The initiative has faced opposition from lawmakers, including Senators Edward Markey and Elizabeth Warren, who expressed concerns regarding fees and performance. Additionally, a survey by the National Institute on Retirement Security indicated that 77% of Americans view the inclusion of crypto in retirement accounts as risky.
