U.S. Sen. Tommy Tuberville is among several voices in Congress currently arguing that the U.S. Department of Labor overstepped its authority earlier this year in cautioning 401(k) and retirement plans against adding cryptocurrency to investment plans.
The Alabama senator has gone so far as to introduce a bill that would prohibit the department from issuing such guidance. Florida Rep. Byron Donalds introduced companion legislation in the House.
In a statement last month, Tuberville called the department’s directive “government overreach at its finest.”
“The government has no business standing in the way of retirement savers who want to make their own investment choices,” Tuberville said. “When you’ve earned your paycheck, how you invest your money should be your decision.”
Back in March, the department issued its compliance assistance, citing a need to protect the retirement savings of workers. It cautioning retirement plan custodians to “exercise extreme care” in adding cryptocurrencies, such as Bitcoin.
According to the department, as of 2019, private pension plans held an estimated $6.2 trillion on behalf of about 91 million defined contribution 401(k) plan participants.
Since 2020, the cryptocurrency market has seen tremendous highs and devastating lows – surging to about $3 trillion in total assets last November, then crashing to less than $1 trillion, according to Bloomberg.
In April, Fidelity Investments announced an option to invest 401(k) funds in Bitcoin. But the DOL says cryptocurrencies carry “significant risks of fraud, theft, and loss…”
Tuberville, however, says the DOL guidance undermines the ability of retirement plan participants to personally control how their assets are invested through brokerage windows.
In Roll Call, Tuberville is quoted as saying he is not telling people to invest in cryptocurrency.
“Nobody should have the ability to say, listen, we’re going to try to protect you and keep you out of these certain avenues that you might want to get into, and that’s not the federal government’s business,” Tuberville said.