"Stability over profits"... Industry warns against including virtual assets and private equity funds in retirement pensions

On the 7th (local time), President Donald Trump of the United States signed an executive order including alternative assets such as virtual assets (cryptocurrency), private equity funds, and real estate as investment options for employees' retirement pensions (401(k)).

In response, the industry has expressed concerns that including high-risk and non-traditional assets in retirement pensions, which aim for long-term stability, may not be appropriate. According to CNBC, Jerry Schlichter, founding partner of Schlichter Bogard, pointed out, "Virtual assets have no long-term track record and display significant short- and mid-term volatility," adding, "Including them in retirement pensions—meant to safely prepare for old age—is like trying to fit a square peg in a round hole."

In particular, the industry cites high fees, lack of liquidity, and complexity as major risk factors for non-traditional assets. In general, private equity funds charge an annual 2% management fee and, in addition, usually take 20% of profits above a certain threshold. In contrast, index funds have fees close to 'zero.' Furthermore, private equity funds often have restrictions on redemptions or require funds to be tied up for long periods, making it difficult for investors to sell when they need cash. Lower regulatory oversight creates additional disadvantages in terms of transparency regarding investment strategies and portfolios.

Schlichter emphasized, "If you do not fully understand the investment structure, you should not make it a core part of retirement assets," adding, "What matters in a 401(k) is not complex strategies, but proven long-term stability."