Key Insights:
- Montana Representative Troy Downing introduced legislation on October 14 to codify President Trump’s Executive Order 14330, which pertains to alternative assets in 401(k) plans.
- The bill directs the DOL and SEC to reduce barriers preventing private equity, real estate, and digital assets from being included in retirement accounts.
- Five Republican lawmakers signed as original cosponsors, with the American Securities Association expressing support for the measure.
One of the most significant crypto news recently was Montana Congressman Troy Downing introducing the Retirement Investment Choice Act on October 14, codifying President Donald Trump’s executive order that expanded access to alternative investments for 401(k) participants.
Crypto News: Bill Targets Regulatory Barriers for Alternative Assets
The legislation directed the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to reduce regulatory barriers that prevent investments in private equity, real estate, and digital assets from being included in 401(k) retirement plans.
Representatives Byron Donalds, Warren Davidson, Marlin Stutzman, Buddy Carter, and Barry Moore joined as original cosponsors.
The single-page bill stated that Executive Order 14330 “shall have the force and effect of law.” The measure carried the formal title HR in the 119th Congress’s first session.
Downing filed the bill following Trump’s August 7 executive order. The congressman previously joined Financial Services Chairman French Hill, Capital Markets Subcommittee Chair Ann Wagner, and six committee members in a letter supporting the executive action.
The bipartisan coalition supported expanding access to alternative assets for 90 million Americans.
The letter requested SEC assistance to the Department of Labor in revising regulations regarding alternative assets in retirement plans. The lawmakers specifically asked for a review of bipartisan legislation concerning accredited investors.
The defined-contribution market held $12.2 trillion in assets as of March 31, with $8.7 trillion in 401(k) plans. A 0.1% default allocation across 10% of plans would produce $1.22 billion in crypto investment flows, such as Bitcoin and Ethereum ETFs.
Signatories included Representatives Frank Lucas, Warren Davidson, Marlin Stutzman, Andrew Garbarino, Michael Lawler, Troy Downing, and Mike Haridopolos.
Executive Order Expanded Investment Options for 90 Million Americans
Trump’s Executive Order 14330 established a policy allowing retirement plan fiduciaries to offer alternative assets when such investments provided appropriate opportunities to enhance risk-adjusted returns.
The order defined alternative assets as private market investments, real estate holdings, digital asset vehicles, commodities, infrastructure projects, and lifetime income strategies.
The executive order directed DOL to reexamine guidance within 180 days regarding fiduciary duties under the Employee Retirement Income Security Act.
Trump specifically called for a review of DOL’s December 2021 Supplemental Private Equity Statement issued during the Biden administration.
The order instructed the Secretary of Labor to clarify fiduciary processes for offering asset allocation funds with alternative assets.
The DOL received direction to propose rules or guidance establishing criteria for fiduciaries to balance higher expenses against the objectives of achieving greater long-term returns and broader diversification.
Trump’s order noted that wealthy Americans and government pension participants had access to alternative assets, while more than 90 million Americans in employer-sponsored defined-contribution plans lacked similar opportunities.
The executive action referenced a 2020 information letter from Trump’s first term that recognized prudent federal action could encourage allocation of retirement interests to alternative assets.
Industry Group Backed Legislative Effort
American Securities Association President Chris Iacovella stated that the organization applauded Downing’s leadership in codifying the 401(k) executive order into law.
The trade group said the measure would expand investment opportunities for retirement savers and retirees.
Downing stated that alternative investments held potential to strengthen financial security for Americans saving for retirement. The congressman said he led the congressional effort to codify the executive order and preserve the policy.
The executive order directed the SEC to consult with the Secretary of Labor on ways to facilitate access to alternative assets for participants in defined-contribution plans.
Facilitation methods included consideration of revisions to regulations on accredited investor and qualified purchaser status.
Trump’s order instructed DOL to prioritize actions curbing ERISA litigation that constrained fiduciaries’ judgment in offering investment opportunities.
The president states that regulatory overreach and the encouragement of lawsuits by trial lawyers have stifled investment innovation and relegated 401(k) participants to asset classes that lack the long-term benefits achieved by public pension plans.