Key Takeaways
- • Indiana Governor Mike Braun signed House Bill 1042 into law, requiring certain state-run public defined contribution plans to offer self-directed brokerage accounts with at least one cryptocurrency investment option by July 1, 2027.
- • The mandate covers Hoosier START, the state's public employees' deferred compensation plan (457(b) and 401(a)), the state legislators' defined contribution plan, and other retirement funds for specified public employees and teachers.
- • The brokerage window currently holds about 1% of total plan assets, according to Matt Petersen of the National Association of Government Defined Contribution Administrators, who does not expect a major effect.
- • Indiana's approach of mandating a specific asset class, rather than merely permitting it, is viewed as unusual and political by Anthony Randazzo of the Equable Institute, who expects copycat bills in other states.
- • The law also bars state agencies other than the Indiana Department of Financial Institutions from restricting digital assets as payment and prohibits outlawing digital asset mining.
Summary
Indiana lawmakers have mandated that certain state-run public defined contribution plans offer cryptocurrency investment options by 2027. Governor Mike Braun signed House Bill 1042 into law, setting July 1, 2027 as the deadline for state retirement plans to offer self-directed brokerage accounts with at least one cryptocurrency investment option, according to the primary source report.
The law applies to Hoosier START, the state's public employees' deferred compensation plan offering 457(b) and 401(a) plans, the state legislators' defined contribution plan, and other retirement funds and accounts for specified public employees and teachers. A February report from the state's Legislative Services Agency warned that the bill would increase workload for the Indiana Public Retirement System board and the Hoosier START deferred compensation committee, which would be required to adopt rules for the chosen investment program. Tom Perkins, investment counsel and director of the Indiana Public Retirement System, testified before a state Senate Finance Committee that his organization worked with the state House on the bill and was "more or less happy" with it.
State Representative Kyle Pierce, a Republican, introduced the bill in December, saying it would give "more investment choices while establishing guardrails." The measure aligns with a broader political push to expand access to alternative assets, following President Donald Trump's August executive order encouraging 401(k) plan investment in private assets.
Industry observers were skeptical of the law's practical scale. Matt Petersen, executive director of the National Association of Government Defined Contribution Administrators, called the statute's imposition of investment requirements on the brokerage window "unusual" and noted that about 1% of all money is in the window, so he does not expect much effect. Anthony Randazzo, founder and CEO of the Equable Institute, a nonprofit that studies public pensions, described the law as "curious" for mandating an asset class that was not explicitly outlawed, and said other states could follow with copycat bills. "The nature of a law that mandates a niche asset class... is almost by its nature political, because it is stepping... into the fiduciary oversight process," Randazzo said.
The law also prevents state agencies, other than the Indiana Department of Financial Institutions, from prohibiting or limiting the use of digital assets as payment, and bars outlawing or restricting digital asset mining businesses. Separately, Missouri lawmakers are reviewing H.B. 2080, which would authorize a "Bitcoin Strategic Reserve Fund" able to accept Bitcoin gifts and potentially invest state funds in cryptocurrency.
The law applies to Hoosier START, the state's public employees' deferred compensation plan offering 457(b) and 401(a) plans, the state legislators' defined contribution plan, and other retirement funds and accounts for specified public employees and teachers. A February report from the state's Legislative Services Agency warned that the bill would increase workload for the Indiana Public Retirement System board and the Hoosier START deferred compensation committee, which would be required to adopt rules for the chosen investment program. Tom Perkins, investment counsel and director of the Indiana Public Retirement System, testified before a state Senate Finance Committee that his organization worked with the state House on the bill and was "more or less happy" with it.
State Representative Kyle Pierce, a Republican, introduced the bill in December, saying it would give "more investment choices while establishing guardrails." The measure aligns with a broader political push to expand access to alternative assets, following President Donald Trump's August executive order encouraging 401(k) plan investment in private assets.
Industry observers were skeptical of the law's practical scale. Matt Petersen, executive director of the National Association of Government Defined Contribution Administrators, called the statute's imposition of investment requirements on the brokerage window "unusual" and noted that about 1% of all money is in the window, so he does not expect much effect. Anthony Randazzo, founder and CEO of the Equable Institute, a nonprofit that studies public pensions, described the law as "curious" for mandating an asset class that was not explicitly outlawed, and said other states could follow with copycat bills. "The nature of a law that mandates a niche asset class... is almost by its nature political, because it is stepping... into the fiduciary oversight process," Randazzo said.
The law also prevents state agencies, other than the Indiana Department of Financial Institutions, from prohibiting or limiting the use of digital assets as payment, and bars outlawing or restricting digital asset mining businesses. Separately, Missouri lawmakers are reviewing H.B. 2080, which would authorize a "Bitcoin Strategic Reserve Fund" able to accept Bitcoin gifts and potentially invest state funds in cryptocurrency.
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