- May 27, 2022
US Senator Proposes Bill for Crypto Pension Plans
- The Alabama senator says the government should not interfere with the way users invest their retirement savings
- To this end, he wants to introduce the Financial Freedom Act
- The Ministry of Defense and Senator Elizabeth Warren have already taken steps against Fidelity Investments’ plan to offer crypto investments for retirement savings
At the end of April, Fidelity Investments announced the launch of a new service that would allow employees in the 23,000 companies that Fidelity Investments serves to complete Bitcoin investments of up to 20% of the 401(k) pension plan. With the deployment, users could invest in crypto without the participation of crypto exchanges
The DOL had warned against such an offer
Fidelity’s latest move meant that the provider of retirement plans had directly violated the guidelines issued by the Department of Labor (DOL) in March, which warned against such an offer. Although Fidelity has introduced measures such as the requirement to register to use the service, the DOL had already “serious concerns about the decisions of plans to suspend participants direct investments in cryptocurrencies or related products such as NFTs, coins and crypto assets.“ It even warned that those who would participate in such offers could face legal action.
Warren Is Also Fighting the Crypto Pension Plans
Although Fidelity Investments is resolute due to the increased user interest, Senator Elizabeth Warren has joined in and increased the pressure on the asset manager. Together with Minnesota Senator Tina Smith, Warren made the decision, citing the usual volatility concerns , the challenge of users to make informed investment decisions, custody concerns and conflicts of interest have been questioned – which means Fidelity Investment’s involvement in Bitcoin and Ether mining.
“We are also concerned about Fidelity’s potential conflicts of interest and the extent to which they may have influenced the decision to offer Bitcoin”, she said in the letter released Wednesday.
Alabama’s Senator Tuberville defends Fidelity
Alabama Senator Tommy Tuberville, meanwhile, has spoken out against any proposal that would require the U.S. federal government to control how users invest their retirement plan portfolios. In a CNBC-Kommentar of May 5, Tuberville announced that he was proposing a bill – the Financial Freedom Act – that would prevent the government from interfering.
“The Financial Freedom Act, which will be introduced on Thursday, would prohibit the US Department of Labor from issuing an ordinance or guidance restricting the type of investments that self-directed 401(k) account investors can select through a broker window“, the Republican lawmaker wrote in an article published on Thursday.
Tuberville added that the Employee Benefits Security Administration, a ” a small but powerful authority.“, im DOL, which disregarded common practice because its policies prevented bar 401(k) accounts from investing in a particular asset class – crypto.
“This policy change is contrary to long-standing practice. The Ministry of Labor has long allowed employers to offer brokerage windows as an option for employees who prefer to personally manage the money they have earned hard. The agency’s new guidelines end this tradition of economic self-determination in favor of big brother government control.“