“The federal government has no business interfering with the ability of American workers to invest their 401(k) plan savings as they see fit,” the Republican lawmaker wrote in a piece published Thursday.
He was referring to Fidelity’s announcement this month that it will open its 401(k) plans to bitcoin by the middle of 2022. The company, which manages $2.7 trillion in assets for 20 million clients, is the first major retirement-plan provider to make such a move.
The announcement was met with skepticism from the Department of Labor’s Employee Benefits Security Administration in a March 10 notice, saying fiduciaries “must exercise extreme care” before including direct investment options in cryptocurrency.
Tuberville called the Employee Benefits Security Administration a “small but powerful agency” that regulates the $6.2 trillion 401(k) investment industry covering about 91 million American workers.
“Whether or not you believe in the long-term economic prospects of cryptocurrency, the choice of what you invest your retirement savings in should be yours not that of the government,” wrote Tuberville in saying he would introduce the Financial Freedom Act on Thursday.
The former Auburn University football coach elected to the Senate in 2020 said his bill would prohibit the Labor Department 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 act would also “hold harmless” a 401(k) plan’s decision-makers who authorize individual retirement savers to self-direct their investment choices using a brokerage window.
“For decades, 401(k) participants in plans with brokerage windows have been able to buy and sell investments of their choice – that freedom to choose is the entire purpose of the brokerage window,” he said. “The Labor Department should not be able to limit the range or type of investments retirement savers can select.”
Fidelity will let customers put up to 20% of their savings into bitcoin and other cryptocurrencies will likely be added later.