U.S. Sen. Steve Daines (R-MT) is among a group of Republican senators that are urging the U.S. Department of Labor (DOL) to expeditiously implement a recent executive order that would allow Americans to invest in alternative investments in their 401(k) plans.
“Like the President, we believe this is a critical step in leveling the playing field for the 90 million American workers with a 401(k) or other defined contribution retirement plan who lack the freedom to invest in private equity, cryptocurrency, and other alternative assets,” Daines and his colleagues wrote in an Aug. 22 letter to DOL Secretary Lori Chavez-DeRemer. “We urge you to work expeditiously to implement the executive order with a regulatory safe harbor through a formal notice and comment rulemaking. Doing so will maximize the order’s effectiveness and ensure industry has the certainty needed to deliver on behalf of American retirees.”
The letter was also signed by Sens. Markwayne Mullin (R-OK), Jim Banks (R-IN), Bernie Moreno (R-OH), Cynthia Lummis (R-WY), Bill Hagerty (R-TN), Katie Britt (R-AL), Eric Schmitt (R-MO) and Bill Cassidy (R-LA).
The lawmakers pointed out that defined-benefit plans allocate roughly one-third of their $12 trillion in retirement assets to alternative assets. However, these same assets are unavailable to those with defined contribution or 401(k) plans.
“This disparate treatment is especially unfair considering the lack of material differences between the average characteristics or risk profiles of workers with a 401(k) versus those with a defined-benefit plan,” the letter stated. “As the preference for defined-contribution plans has continued to grow, modernizing the regulatory framework and addressing the lack of equal access has become even more essential to enhancing the retirement security of America’s workers.”