The executive order mandates that the Secretary of Labor review the guidelines for 401(k)s under ERISA within 180 days. It aims to clarify the position on including alternative assets. Traditionally, private market assets like cryptocurrencies and private equity have been excluded due to their high fees, lack of transparency, and longer lockup periods. The executive order could provide fund managers access to a massive $12 trillion, marking a significant shift in funding options for retirement accounts. This move also indicates heightened support for cryptocurrencies and deregulation efforts in the sector.
The executive order gives the Secretary of Labor 180 days to review the guidelines that determine the rules for 401(k)s under the Employee Retirement Income Security Act of 1974, known as ERISA.
Private market assets haven't been included in 401(k)s mainly due to their high fees, lack of transparency, and longer lockup periods, making them riskier investments.
This could give fund managers access to a staggering $12 trillion and create a new source of funding besides traditional stocks, bonds, and cash.
The executive order exemplifies the administration's support of cryptocurrencies and the push to loosen regulations around digital currencies.
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