Key Takeaways
- • The Labor Department sent its proposed 401(k) alternative assets rule to the White House's Office of Information and Regulatory Affairs (OIRA) for final review on Thursday, November 6, 2026, a step that could allow crypto in retirement plans.
- • The March proposal names no specific cryptocurrencies, sets no minimum market capitalization, and requires plan managers to weigh six factors: performance, fees, liquidity, valuation, benchmarks and complexity.
- • The rule does not require any plan to offer crypto, and the Labor Department has not published a cost estimate despite acknowledging potentially higher expenses.
- • Experts expect Bitcoin and Ether to be considered first, with ETFs and managed funds likely to precede direct crypto holdings; one expert projects some options in 2027 and wider availability by 2028.
- • Legal protection for plan fiduciaries is limited, and the rule could be reversed by a future administration, a risk that Trace Finance CEO Bernardo Brites says plan designers must weigh against ten-year plan horizons.
Summary
The U.S. Labor Department filed its proposed rule on alternative assets in 401(k) plans with the Office of Information and Regulatory Affairs, the Office of Management and Budget unit that reviews federal rules before publication. According to the article, the filing follows an executive order from President Donald Trump directing the department to open retirement plans to alternative assets, including digital assets and private equity. The department first unveiled the proposal in March.
The proposal does not identify which digital assets could be included and sets no minimum market capitalization. Instead, it directs plan managers to evaluate investments against six factors: performance, fees, liquidity, valuation, benchmarks and complexity. The rule is intended to provide employers and plan managers with greater legal protection, and it does not require any plan to offer crypto. In its filing, the department said it must balance potentially higher expenses against the prospect of better long-term returns and broader diversification, but it did not quantify those costs.
The department had earlier reversed Biden-era guidance that discouraged retirement plan managers from considering crypto. Senators Bernie Sanders and Elizabeth Warren pressed the department earlier this year to withdraw the rule, arguing it would expose investors to volatile assets.
Experts interviewed in the article diverge on smaller tokens. Teresa Goody Guillén, managing partner at Bellementis PLLC, said Bitcoin and Ether will likely come first given their established markets and investment products. CoinGecko data cited in the article valued Bitcoin at about $1.5 trillion and Ether at about $273 billion as of 20:01 UTC on November 6. Guillén said smaller coins are not automatically excluded, as plan managers would need to show an investment meets the same standards applied to any retirement option: "Big doesn't mean suitable, and small doesn't mean disqualified." Bernardo Brites, co-founder and CEO of Trace Finance, took a stricter position, arguing that Bitcoin and Ether pass the six-factor test while other tokens would likely fail on track record or benchmarks before market capitalization becomes relevant. He said a plan committee must be able to document a reliable daily price from a regulated product: "If not, it is not going in."
Both experts expect a gradual rollout. Guillén said ETFs and managed funds would likely precede direct holdings because they fit existing custody and recordkeeping systems. Direct holdings raise storage, cybersecurity and pricing concerns, which Guillén said should not automatically disqualify them. Brites expects existing brokerage options to come first, followed by standalone ETFs and funds with small crypto allocations, with some options in 2027, ETFs at larger employers later that year, and wider availability by 2028.
Legal risk may also slow adoption. Brites noted that the proposal would give plan managers some protection from lawsuits but would not prevent them from being sued over investment choices. He pointed out that the 2022 guidance was reversed in 2025, so a plan designer signing a ten-year plan must consider that this rule could be reversed as well, and that courts now give agencies less deference, leaving the strength of the protection uncertain. Brites said White House review can take up to ninety days, after which publication follows and the rule typically takes effect about sixty days later.
The proposal does not identify which digital assets could be included and sets no minimum market capitalization. Instead, it directs plan managers to evaluate investments against six factors: performance, fees, liquidity, valuation, benchmarks and complexity. The rule is intended to provide employers and plan managers with greater legal protection, and it does not require any plan to offer crypto. In its filing, the department said it must balance potentially higher expenses against the prospect of better long-term returns and broader diversification, but it did not quantify those costs.
The department had earlier reversed Biden-era guidance that discouraged retirement plan managers from considering crypto. Senators Bernie Sanders and Elizabeth Warren pressed the department earlier this year to withdraw the rule, arguing it would expose investors to volatile assets.
Experts interviewed in the article diverge on smaller tokens. Teresa Goody Guillén, managing partner at Bellementis PLLC, said Bitcoin and Ether will likely come first given their established markets and investment products. CoinGecko data cited in the article valued Bitcoin at about $1.5 trillion and Ether at about $273 billion as of 20:01 UTC on November 6. Guillén said smaller coins are not automatically excluded, as plan managers would need to show an investment meets the same standards applied to any retirement option: "Big doesn't mean suitable, and small doesn't mean disqualified." Bernardo Brites, co-founder and CEO of Trace Finance, took a stricter position, arguing that Bitcoin and Ether pass the six-factor test while other tokens would likely fail on track record or benchmarks before market capitalization becomes relevant. He said a plan committee must be able to document a reliable daily price from a regulated product: "If not, it is not going in."
Both experts expect a gradual rollout. Guillén said ETFs and managed funds would likely precede direct holdings because they fit existing custody and recordkeeping systems. Direct holdings raise storage, cybersecurity and pricing concerns, which Guillén said should not automatically disqualify them. Brites expects existing brokerage options to come first, followed by standalone ETFs and funds with small crypto allocations, with some options in 2027, ETFs at larger employers later that year, and wider availability by 2028.
Legal risk may also slow adoption. Brites noted that the proposal would give plan managers some protection from lawsuits but would not prevent them from being sued over investment choices. He pointed out that the 2022 guidance was reversed in 2025, so a plan designer signing a ten-year plan must consider that this rule could be reversed as well, and that courts now give agencies less deference, leaving the strength of the protection uncertain. Brites said White House review can take up to ninety days, after which publication follows and the rule typically takes effect about sixty days later.
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