The House Committee on Financial Services has sent a letter to the Chairman of the SEC, Paul Atkins, in support of the Executive Order that mandates the inclusion of alternative assets in 401 (k) plans.
In the US, few firms offer pensions or defined benefit plans, instead deferring to 401(k) or defined contribution plans. Last month, President Donald Trump signed an Executive Order Democratizing Access to Alternative Assets for 401(k) Investors, directing officials to enable the inclusion of alternative assets in these popular retirement accounts. Republican leadership of the House Financial Services Committe is now asking the SEC to speed things up in making “any necessary regisions to its current regulations and guidance.”
“We are hopeful that such actions will help the 90 million Americans that are currently restricted from investing in alternative assets to secure a dignified, comfortable retirement.”
Alternative assets are defined in the EO as follows:
- private market investments, including direct and indirect interests in equity, debt, or other financial instruments that are not traded on public exchanges, including those where the managers of such investments, if applicable, seek to take an active role in the management of such companies
- direct and indirect interests in real estate, including debt instruments secured by direct or indirect interests in real estate
- holdings in actively managed investment vehicles that invest in digital assets
- direct and indirect investments in commodities
- direct and indirect interests in projects financing infrastructure development
- lifetime income investment strategies, including longevity risk-sharing pools
Atkins has already indicated his support for the EO on alternative assets.
As the world of investable assets has expanded and is expected to continue doing so, the number of publicly traded equities has declined. As has been mentioned in the past, expanding options for investors may provide an opportunity to benefit from growing markets, as well as provide additional diversification.
