A long-anticipated proposal that would pave the way for more alternative investments like cryptocurrency and private equity in 401(k)s has left the White House’s regulatory review.
The Office of Information and Regulatory Affairs concluded its review late Tuesday. It had arrived for review on Jan. 13.
Passage through OIRA clears the way for the Department of Labor to publish the proposed rule in the coming weeks. If finalized, it would bring major changes to the legal and regulatory landscape for the roughly $12 trillion 401(k) market.
The DOL’s Employee Benefits Security Administration was given 180 days by President Donald Trump in an August executive order to reevaluate guidance around alternative asset investments in plans that are subject to the Employee Retirement Income Security Act of 1974.
EBSA is expected to use its proposal to provide legal cover for employers concerned that offering access to alternative assets in their retirement plans would expose them to excessive fiduciary risk.
Employers sponsoring retirement plans are already vulnerable to lawsuits from plan participants who believe their 401(k)s have underperformed or are subject to excessive fees.
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