BlackRock Global Head of Retirement Solutions Nick Nefouse joins ‘Varney & Co.’ to discuss a proposed rule expanding 401(k)s to crypto and real estate.
A proposed rule from the Department of Labor could significantly increase the amount of space Americans can hold in their retirement accounts, potentially opening the door to assets like cryptocurrency, real estate and private markets.
BlackRock Global Head of Retirement Solutions Nick Nefouse described the rule as “a huge step forward for the 401(k) market” while discussing what the change could mean for everyday investors during his appearance on “Varney & Co.” Tuesday.
Secretary of Labor Lori Chavez-DeRemer joins ‘Mornings with Maria’ to discuss a sweeping proposal to expand 401(k) investment options, potentially opening the door to crypto and real estate for millions of Americans.
“The proposed regulation explains the steps that 401(k) plan managers must take when considering alternative assets as part of their investment offerings and establishes a series of process-based safe harbors that plan fiduciaries can use when selecting appropriate investment alternatives,” the Department of Labor said in a March 30 press release.
Rather than approving specific investments, Nefouse suggested the proposal focuses on creating a structured process for plan providers to follow when evaluating alternative assets.
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“What the rule is trying to do is establish a process, and not necessarily say which asset classes are good or bad,” Nefouse said.
U.S. Department of Labor Headquarters in Washington, DC (Celal Gunes/Anadolu via Getty Images/Getty Images)
This shift could narrow the long-standing gap between pension systems. While large institutional-style plans already have access to a broader range of investments, many employees in traditional 401(k) plans do not.
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“Think about regular people. About 25% of the population has a defined benefit plan. About 80% has a defined contribution plan,” Nefouse said.
“What we’re trying to do is level the playing field, and so many Americans rely on 401(k) plans,” he added.
The change could broaden access to investment options that have traditionally been limited to institutional retirement plans.
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