The encrypted version of the 401(k) rules has been submitted to the White House for final review.
The U.S. Department of Labor has submitted the final rules regarding alternative investments in retirement plans to the White House for review, advancing a framework that may make it easier for employers to offer exposure to crypto assets through 401(k) accounts.
- OIRA received the final rules on November 5th, and currently it is displayed as pending review.
- The proposal put forward in March outlined six factors that trustees should consider when choosing investment options.
- According to the data from ICI, as of the end of June, Americans held assets in 401(k) plans totaling 10.8 trillion dollars.
- The $216 billion crypto asset allocation scenario proposed by Sweep assumes that 2% of the funds flow into digital assets.
The Office of Information and Regulatory Affairs ( OIRA ) of the United States has classified this measure as “ Fiduciary Duties In Selecting Designated Investment Alternatives ” and identified it as the final rule submitted by the Bureau of Laborers’ Welfare and Safety Administration. This entry is assigned the rule number 1210- AC38 , and the action is categorized as a major economic matter.
This rule was received on Thursday, November 5th, and is still under review at this time; no legal deadline has been set yet. This submission follows a proposal announced by that department on March 30th, which dealt with how retirement plan managers should evaluate investment options, including funds holding private equity, real estate, and digital assets.
Admission to encrypted 401(k) plans will depend on the decisions of the trustees.
In a March announcement, the Department of Labor stated that managers responsible for establishing payment plans already had the authority to consider alternative assets, although historically few have actually done so.
The proposed framework outlines a set of procedures for managers to refer to when deciding whether to include a particular investment in the plan menu. Its safe harbor provisions relate to the duty of care under the Employee Retirement Income Security Act, which is a federal law that regulates private sector retirement plans.
The Department of Labor claims that its approach remains neutral towards different investments. Deputy Secretary of Labor Keith Sonderling stated that the proposal “does not suggest that any asset class is better or worse than other types of investments.”
According to the explanatory documents from the Department of Labor, this framework will apply to any designated investment alternatives, not limited to funds that contain alternative assets. As long as the prescribed procedures are followed, trustees will be presumed to have met the due diligence requirements in terms of the factors considered.
crypto.news Previous reports stated that the proposal was approved by the White House on March 24. The submission in November involved the final rule-making stage; previously, the proposal was published in the Federal Register on March 31, with a public comment deadline of June 1.
Six factors cover costs, redemption, and investment risks
The proposed rules for March list six non-exhaustive factors: performance, fees, liquidity, valuation, performance benchmarks, and complexity.
In terms of performance, the Department of Labor requires trustees to compare a reasonable number of similar investments and to assess the expected returns after deducting fees, taking into account risks and an appropriate investment period. The example acknowledges that even if the expected return on a particular strategy is low, it may still be a prudent choice as long as its risk characteristics contribute to achieving the plan's objectives.
Costs will be assessed separately. This proposal does not require managers to choose the cheapest product under any circumstances, but it indicates that higher costs should be supported by the expected returns or other benefits of the investment.
Liquidity assessment will consider whether a particular investment can meet the expected needs at both the plan level and the participant level. The explanatory document lists events that may require the use of funds, such as retirement withdrawals, departures from employment, financial difficulties, investment reallocations, and plan loans.
Valuation and benchmarking provisions involve how managers assess investments for which there is no available market price. The proposal defines meaningful benchmarks that are similar to the authorization, strategy, objectives, and risks of the investment, and complexity is part of the trustee's review of the product.
The estimate of $216 billion is based on a 2% allocation to crypto assets.
Sweep stated in a post on November 6th that if 2% of the funds held in US 401(k) accounts were transferred to crypto assets, it would bring in $216 billion in new capital.
This calculation uses a base of $10.8 trillion in assets. This figure is consistent with the second-quarter data from the Investment Company Association ( ICI ), which shows that as of June 30, 2026, 401(k) assets amounted to $10.8 trillion.
Multiplying that balance by 2% yields $216 billion, but the scenario assumed by Sweep is one where the entire asset pool is allocated. No timeline is provided, nor are there any announced commitments from employers, plan managers, or participants.
The data for ICI describes the assets that are already held in retirement accounts. As of June, mutual funds manage a total of $6.2 trillion, which constitutes 58% of 401(k) assets, of which stock funds account for $3.7 trillion, and hybrid funds (including target-date funds) hold $1.7 trillion.
