U.S. Senator Tommy Tuberville (R-Alabama) on Thursday introduced the Financial Freedom Act. The legislation would prohibit the U.S. Department of Labor (DOL) from issuing a regulation or guidance that limits the type of investments that self-directed 401(k) account investors can choose through a brokerage window.
“Folks work for decades, live within their means, and invest wisely so they can retire comfortably,” said Tuberville. “Now, the Biden administration has taken it upon itself to dictate what assets are viewed worthy of retirement investment, taking the decision away from individual investors by issuing regulatory guidance targeting cryptocurrency. This is government overreach at its finest. The government has no business standing in the way of retirement savers who want to make their own investment choices. When you’ve earned your paycheck, how you invest your money should be your decision. My legislation makes sure that is the case.”
Tuberville said that the Financial Freedom Act was introduced in response to March 10th regulatory guidance released by the Employee Benefits Security Administration, an agency inside of U.S. Department of Labor (DOL). The Biden Administration is attempting to bar 401(k) investors from investing in cryptocurrency. Tuberville claims that the guidance undermines the ability of 401(k) plans to offer brokerage windows, which give retirement plan participants the ability to personally control how their assets are invested.
"The Labor Department’s overreaching guidance seeks to place a massive new regulatory burden on 401(k) plan fiduciaries by requiring them to assess the suitability of investments offered through a brokerage window and to restrict investment options,” Tuberville wrote in an op-ed for CNBC. “If a company or financial firm allows their 401(k) investors to choose to invest in cryptocurrency, they will now be at risk for heavy-handed enforcement actions.”
The U.S. Department of Labor published its compliance assistance for 401(k) plan fiduciaries considering plan investments in cryptocurrencies, in an effort they say is aimed at protecting the retirement savings of U.S. workers.
Compliance Assistance Release No. 2022-01 cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.
“Today’s announcement reminds plan fiduciaries of their important role in selecting investment options for 401(k) plan menus,” said Employee Benefits Security Administration Acting Assistant Secretary Ali Khawar. “At this stage of cryptocurrency’s development, fiduciaries must exercise extreme care before including direct investment options in cryptocurrency.”
The Department of Labor reports that as of 2019, an estimated $6.2 trillion is being held in 401(k)s on behalf of about 91 million Americans.
Bitcoin, which launched in 2008, was the first cryptocurrency, and it remains the biggest, most influential, and best-known, although there are hundreds more cryptocurrencies that have popped up in the last 14 years. Bitcoin and other cryptocurrencies claim that they are digital alternatives to money issued by governments.
Sen. Tuberville is in his first term representing Alabama in the U.S. Senate.
To connect with the author of this story, or to comment, email brandon.moseley@1819News.com.
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