A U.S. Labor Department rule that could make it easier for employers to offer crypto assets, private equity and real estate in 401(k) plans has reached final White House review. The proposal would provide legal protections to employers that assess these investments under specified criteria, but would not require plans to include them.
The policy concerns a vast pool of retirement savings. Employer-sponsored savings plans held about $15 trillion in assets as of the end of June, according to the Investment Company Institute. Asset managers are seeking access to that market, while any crypto options in 401(k) plans would ultimately depend on decisions by employers and plan administrators.
Rule sets out six factors for employer review
The final rule was submitted to the Office of Information and Regulatory Affairs (OIRA), which reviews significant regulatory measures. It implements an executive order signed by Donald Trump and centers on a “safe harbor” for employers that follow specified evaluation requirements when considering these assets.
Employers would assess six factors: investment performance, fees, liquidity, valuation, benchmarks and product complexity. Those that meet the requirements would be presumed to have acted prudently in related litigation. The proposed rule argued that the risk of lawsuits had limited the investment options employers were willing to offer; the safe harbor is intended to address that concern.
The rule would not automatically give plan participants access to crypto, nor would it let employers add products without review. Employers would retain the choice. The measure would establish a legal-protection framework, not a requirement to allocate retirement savings to these assets.
Publication and employer decisions still to come
OIRA can take up to 90 days to complete its review. The review of an earlier draft was shorter: federal records show the office received it on January 13 and completed its review on March 24. The final rule is now at the same office for its last review, but no publication date has been provided.
In June, three Democratic lawmakers urged the administration to withdraw the rule, as debate continues over whether retirement plans should open up to more alternative assets. For savers, completion of the review would not mean they could immediately invest in crypto through a 401(k). The rule must first be published, and employers would then decide whether to offer such options after considering the six factors.