The Alabama senator says the government shouldn’t interfere with how users invest their retirement savings
He plans to introduce the Financial Freedom Act to this effect
The DoL and Senator Elizabeth Warren already took moves opposing Fidelity Investments’ plan to offer crypto investments for retirement plans
At the end of April, Fidelity Investments announced the launch of a new service that would allow employees in the 23,000 companies it serves to complete Bitcoin investment of up to 20% of the 401(k) pension plan. With the provision, users would be able to invest in crypto without the involvement of crypto exchanges
The DOL had warned against such an offering
The recent move by Fidelity meant that the retirement plan provider had directly contravened guidance issued by the Department of Labour (DOL) in March, cautioning against any such offering. Though Fidelity established measures such as the requirement to opt-in to use the service, the DOL had already established “serious concerns about plans’ decisions to expose participants to direct investments in cryptocurrencies or related products, such as NFTs, coins, and crypto-assets.” It even warned that those who’d participate in such offerings could face legal action.
Warren’s also fighting the crypto retirement plans
Even though Fidelity Investments is resolute due to increased user interest, Senator Elizabeth Warren has joined in and increased the pressure on the wealth manager. Jointly with Minnesota Senator Tina Smith, Warren has questioned the decision citing the usual volatility concerns, the challenge of users making informed investment decisions, custodial concerns, and conflict of interest – to mean 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 affected the decision to offer Bitcoin,” she said in the letter published on Wednesday.
Alabama’s Senator Tuberville defends Fidelity
Alabama’s Senator Tommy Tuberville has since come out to oppose any proposal that would see the US Federal government control how users invest their retirement plan portfolios. In a May 5 CNBC op-ed, Tuberville revealed that he’s proposing a bill – the Financial Freedom Act – that would prevent the government from interfering.
“The Financial Freedom Act, which will be introduced Thursday, would prohibit the US Department of Labour from issuing a regulation or guidance that limits the type of investments that self-directed 401(k) account investors can choose through a brokerage window,“ the Republican lawmaker wrote in a piece published Thursday.
Tuberville added that the Employee Benefits Security Administration, a “small but powerful agency, in the DOL, disregarded what has been common practice because its directives limit bar 401(k) accounts from investing in a specific investment class – crypto.
“This policy change is inconsistent with longstanding practice. The Labour Department has long permitted employers to offer brokerage windows as an option to employees who prefer to personally manage the money they worked hard to earn. The agency’s new guidance ends this tradition of economic empowerment in favour of big-brother government control.”