Top congressional Democrats are pressing the U.S. Department of Labor to withdraw a proposal that would make it easier for retirement plans—such as 401(k) plans—to offer “alternative assets,” including cryptocurrency, private credit, private equity, and related investments. In a letter to the Department of Labor, lawmakers argue the change could increase financial risk for workers and potentially raise costs through more complex or higher-fee products.
The Hill reports that the lawmakers, identified as “top Democrats,” say the proposal could expose retirement savings to volatility and greater uncertainty. The Guardian adds that the letter, shared with its outlet, includes prominent names such as Senators Bernie Sanders and Elizabeth Warren and House education and workforce committee ranking member Bobby Scott. The Guardian also reports that the Democrats cite the potential exposure of an estimated $14.2 trillion in 401(k) retirement savings to volatile assets and argue the rule may face challenges if tested in court.
The responses reflect concerns that allowing a broader range of digital and private-market investments may not be aligned with protections and suitability requirements for retirement savers.
