Ranking Member Scott Criticizes Latest DOL Plan to Threaten Americans’ Retirement Savings

Ranking Member Scott Criticizes Latest DOL Plan to Threaten Americans' Retirement Savings

WASHINGTON - Ranking Member Robert C. "Bobby" Scott (VA-03), House Committee on Education and Workforce, released the following statement after the Department of Labor (DOL) proposed a new rule establishing a safe harbor for 401(k) plans to offer so-called alternative assets, such as private equity and cryptocurrency, to workers.

"Today, the Department of Labor proposed a new rule to create a safe harbor for 401(k) plans to invest in so-called 'alternative assets,' such as private equity or cryptocurrency. With this proposal, workers may face reckless risk or higher fees in their retirement savings plans. This misguided proposal comes as workers are already struggling to afford everything from groceries to gas, and an increasing number are tapping into their retirement savings for financial emergencies.

"There is nothing in current law prohibiting 401(k) plans from offering these investments. The primary barrier is that they must be prudent investments. This rule would allow President Trump's 'billionaire buddies,' who may run plans that obviously cannot meet any current standard for prudent investment, to get their hands on workers' 401(k)s. The Trump Administration is now going out of its way to tip the scales in favor of cryptocurrency and other so-called 'alternative assets' that are costly, opaque, complex, and difficult to convert into cash.

"This proposal is happening at a time, according to press reports, when the private credit market is experiencing turmoil. And, regrettably, the Trump Administration abandoned an essential Biden-era protection that would have ensured that retirement fund managers act in the best interest of retirement savers and prevented workers from being ripped off.

"Today's proposed rule creates more risks for workers and retirement savers at a time when they can least afford it. This proposed rule reflects the wrong priorities. This is not a close call. I urge the Department to withdraw the proposed rule."

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