Allow cryptocurrency in individual pension plans: Senator Tuberville
Sen. Tommy Tuberville, R-Ala., is seen in the United States Capitol during a Senate vote on February 10, 2022.
tom williams | Cq-roll Call, Inc. | Getty Images
The federal government does not have to interfere with the ability of American workers to invest their 401(k) plan savings as they see fit.
Unfortunately, that is not the view of the Biden administration.
The U.S. Department of Labor issued regulatory guidelines on March 10 in an effort to prevent 401(k) accounts from investing in cryptocurrency, singling out this specific type of investment. The guidance came from the Employee Benefits Security Administration — a small but mighty Labor Department agency tasked by Congress with regulating the $6.2 trillion 401(k) investing industry. covering approximately 91 million American workers.
Department of Labor guidelines threaten to investigate plans that allow participants to screen cryptocurrency investments, including plans with brokerage windows, a tool used by retirement savers to screen themselves. even their investments in the 401(k) plan.
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This change in policy is inconsistent with long-standing practice. The Department of Labor has long allowed employers to offer optional brokerage windows to employees who prefer to personally manage the money they’ve worked hard to earn. The agency’s new directions end this tradition of economic empowerment in favor of big brother government control.
In addition, the Department of Labor’s excessive guidelines are intended to impose a massive new regulatory burden on 401(k) plan trustees by requiring them to assess the suitability of investments offered through a brokerage window and restrict investment options. If a business or financial firm allows its 401(k) investors to choose to invest in cryptocurrency, they will now be exposed to harsh enforcement action.
Additionally, the guidelines were released without an announcement, and the agency circumvented the public notice and comment process set up by Congress that agencies are required to follow.
Americans should be able to invest their retirement savings as they see fit.
That is why I am introducing the Financial Freedom Act today.
My bill would prohibit the Department of Labor from issuing regulations or guidelines that limit the type of investments self-directed investors in a 401(k) account can choose through a brokerage window. In addition, the law would shield makers of a 401(k) plan that allow individual retirement savers to self-manage their investment choices through a brokerage window.
The Financial Freedom Act empowers the American retirement saver and preserves the precedent of freedom of investment. For decades, 401(k) participants in plans with brokerage windows have been able to buy and sell the investments of their choice – this freedom of choice is what the brokerage window is all about. The Department of Labor should not be able to limit the range or type of investments retirement savers can select.
Today, the Biden administration is targeting cryptocurrency. Which investment class is next?
Whether or not you believe in the long-term economic prospects of cryptocurrency, the choice of what you invest your retirement savings in should be up to you, not the government.
Clearly there is value in giving retirement savers the option to invest in cryptocurrency. Fidelity, the nation’s largest 401(k) provider, recently announced that it would make bitcoin available on its platform. They’re not the first vendor to make this move and likely won’t be the last. Unfortunately, the Department of Labor has already criticized these plans to hold investors accountable.
America was built on the idea that we each plan our own destiny. The government who knows best approach advocated by the current administration runs counter to the values that have made our country the most prosperous nation in history.
– By Senator Tommy Tuberville, R-Ala.