PiCK

Summary

  • The US Department of Labor said it had submitted to the White House a rule that would expand the inclusion of alternative assets, including cryptocurrencies, in 401(k) retirement plans.
  • The rule would provide a safe harbor for retirement plan fiduciaries when alternative assets such as private equity, real estate and cryptocurrencies are included among 401(k) investment options.
  • If finalized, the rule could broaden the use of alternative investment products that include cryptocurrencies in the US 401(k) market.

Forecast Trend Report by Period

The US Department of Labor has submitted to the White House a rule that would broaden the inclusion of alternative assets, including cryptocurrencies, in 401(k) retirement plans.

Bloomberg reported on November 6 that the Labor Department's final rule was sent a day earlier to the Office of Information and Regulatory Affairs, which typically conducts the last review before a rule is finalized and released.

The rule would provide a safe harbor that lowers 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 options.

According to a draft the Labor Department released on March 30, safe-harbor eligibility would be determined based on six factors: returns, fees, liquidity, valuation, performance benchmarks and the complexity of a product's structure.

If finalized, the rule could expand the use of alternative investment products, including those tied to cryptocurrencies, in the US 401(k) market.

Minseung Kang