The bill amends ERISA of 1974 to include digital assets under “covered investments,” thereby shielding investment managers from liability.
- Republican lawmakers drafted a bill enabling investment managers to offer bitcoin in 401(k) plans.
- The bill seeks to remove liability for a breach of fiduciary duty for offering access to bitcoin and cryptocurrencies.
- The bill is likely to be presented following the midterm elections in November 2022.
Three republican members of Congress presented a bill, named the Retirement Savings Modernization Act, designed to enable investment managers to offer bitcoin and cryptocurrencies in their 401(k) plans, per a Congressional filing.
The proposed bill amends the Employee Retirement Income Security Act of 1974 to add classifications to the types of assets fiduciaries are permitted to offer.
“A fiduciary shall not be liable for a breach of fiduciary duties under this section solely for — recommending, selecting, or monitoring any covered investment as an investment option for a plan,” reads the bill.
The document continues to define a “covered investment” and lists “digital assets” along with the other standard assets which can be managed within a standard 401(k) savings plan.
Congressional sponsors of the bill include: Senator Pat Toomey (R-Pa.) of the Senate Banking Committee, senator Tim Scott (R-S.C.) and House of Representatives member Peter Meijer (R-Mich.)
“Our legislation will provide the millions of American savers invested in defined contribution plans with the option to enhance their retirement savings through access to the same wide range of alternative assets currently available to savers with defined benefit pension plans,” said Toomey, per a report.
As the midterm elections approach in November we are heading into a “lame duck session,” which typically sees lawmakers stall on voter-moving issues as political incumbents being removed from office are considering legislation before their successors take the reigns.
Additionally, another report suggests that Toomey plans to introduce the bill as an end-of-year tax package deal meant to boost overall retirement savings, as the bill is not only applicable to digital assets.
Fidelity Investments launched the first bitcoin 401(k) earlier this year with bitcoin bull MicroStrategy being the first company to pledge to utilize the product.