Republican lawmakers have presented a bill designed to enable investment managers to offer Bitcoin and other cryptocurrencies in their 401(k) plans according to a Congressional filing.
Republican members of Congress have drafted a bill, named the Retirement Savings Modernization Act, that is designed to allow investment managers to offer Bitcoin and other cryptocurrencies in their 401(k) plans. Sponsors of the bill include Senator Pat Toomey of the Senate Banking Committee, Senator Tim Scott, and House of Representatives member Peter Meijer. The bill aims to remove the liability for a breach of fiduciary duty for offering access to cryptocurrencies. The proposed bill is an amendment to the Employee Retirement Income Security Act of 1974 and adds classifications to the types of assets fiduciaries are allowed to offer. The bill reads:
A fiduciary shall not be liable for a breach of fiduciary duties under this section solely for — recommending, selecting, or monitoring any covered investment as an investment option for a plan.
The bill further outlines a definition of a “covered investment” and lists “digital assets” as assets that can be managed within a standard 401(k) savings plan.
Senator Toomey, who has long been a vocal proponent of cryptocurrencies, said in a report:
Our legislation will provide the millions of American savers invested in defined contribution plans with the option to enhance their retirement savings through access to the same wide range of alternative assets currently available to savers with defined benefit pension plans.
The congressmen have cited inflation and “fiscal uncertainty” as motivation for expanding retirement investment options and have noted that far more Americans rely on their 401(k) savings plans than traditional pensions for retirement. Citizens have however criticised the limits on 401(k) investments as reducing overall returns compared to traditional pensions according to a report by The Block.
The bill is likely to be presented following the November midterm elections.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.