Seven Democratic members of the U.S. Senate recently sent a letter to Labor Secretary Lori Chavez-DeRemer and Securities and Exchange Commission (SEC) Chairman Paul Atkins to express concerns regarding President Donald Trump’s executive order that pushes private market funds and cryptocurrencies into retirement plans.
The senators reiterated that the SEC has issued risk alerts in recent years identifying significant compliance failures among private funds and that the Department of Labor released guidance in 2022 that stated plan fiduciaries should exercise extreme care before considering adding cryptocurrency options to a 401(k) plan’s investment menu.
“Private investments, including private equity, rely on long-term capital, and as a result, usually stipulate lengthy lock-up periods for investors,” the letter said. “This of course makes these investments illiquid, meaning they are not easily sold to other investors or convertible into cash. This raises serious concerns during economic downturns when retirement savers are seeking to access their investments.”
The letter was sent by U.S. Sens. Elizabeth Warren (D-MA), Senate Banking, Housing, and Urban Affairs Committee ranking member; Bernie Sanders (I-VT), Senate Committee on Health, Education, Labor and Pensions ranking member; and Dick Durbin (D-IL), Jeff Merkley (D-OR), Chris Murphy (D-CT), Tina Smith (D-MN), and Ron Wyden (D-OR).