New Bill Would Codify Trump Alts in 401(k)s EO
A newly introduced bill would enforce President Trump’s executive order on alternative investments in 401(k) plans as law.
Rep. Troy Downing (R-MT) introduced the “Retirement Investment Choice Act,” a bill that would codify Trump’s executive order by directing the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to cut back on regulation that would discourage 401(k) participants from investing in private market funds.
Reps. Byron Donalds (R-FL), Warren Davidson (E-OH), Marlin Stutzman (R-IN), Buddy Carter (R-GA), and Barry Moore (R-AL) have also cosponsored the bill.
“Alternative investments hold the transformative potential to supercharge the financial security of countless Americans saving for retirement,” said Rep. Downing in a statement. “I applaud President Trump for his leadership to democratize finance and am proud to be leading the effort in Congress to codify his EO and enshrine this move for generations to come.”
Trump signed his order, “Democratizing Access to Alternative Assets for 401(k) Investors,” on Aug. 7. The order gives the Labor secretary 180 days to review past guidance on private equity in defined contribution (DC) plans previously implemented under the Biden Administration.
It also directs the SEC to work with the DOL in reexamining existing regulation and guidance. Current SEC Chairman Paul Atkins has vocalized his support in alternative investments and confirmed the SEC and DOL’s collaboration in revising regulations. The Labor Department in May removed guidance that had previously discouraged fiduciaries from including cryptocurrency options in 401(k) plans.
At a recent conference, Atkins said the SEC may plan to host a roundtable that would collect input on Trump’s executive order.
Trump’s EO has stirred the retirement plan industry, with many in the business, from Empower, BlackRock, and the American Retirement Association (ARA), supporting the move.
Others have issued concerns over the investment’s volatile nature, adding that its illiquidity along with limited transparency and fluctuating value could deter plan fiduciaries from offering it to plan participants. Introducing 401(k) participants to blockchain technology, which powers crypto investments, could further add to the complexity.
Along with cryptocurrencies and bitcoin, alternative investments also include private equity, real estate, commodities, and lifetime income options.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
