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White House Begins Final Review of Labor Department Rule to Expand Crypto Investment in US 401(k)s
Summary
- The US Department of Labor said it submitted a rule to the White House that would expand the inclusion of crypto assets and other alternative assets in 401(k) plans.
- The rule would provide a safe harbor that reduces legal liability for plan fiduciaries when 401(k)s include alternative assets such as private equity, real estate and crypto assets.
- If finalized, the rule could broaden the use of crypto assets and other alternative investment products in the US 401(k) market.
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The US Department of Labor has submitted to the White House a rule that would expand the use of alternative assets, including cryptocurrencies, in 401(k) retirement plans.
Bloomberg reported on November 6 that the department’s final rule was sent the previous day to the Office of Information and Regulatory Affairs, the White House office that reviews major regulations. An OIRA review is typically the last step before a rule is finalized and released.
The rule would provide a safe harbor that reduces legal liability for retirement-plan fiduciaries if they meet certain requirements when including alternative assets such as private equity, real estate and cryptocurrencies in 401(k) investment menus.
Under a draft the Labor Department released on March 30, safe-harbor eligibility would be assessed using six factors: returns, fees, liquidity, valuation, performance benchmarks and the complexity of the product structure.
If finalized, the rule could broaden the use of alternative investment products, including cryptocurrencies, across the US 401(k) market.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.