John,
Donald Trump’s Executive Order 14166, signed in August, gives Wall Street unprecedented access to push risky assets, such as private equity funds and cryptocurrencies, into ordinary Americans’ defined-contribution retirement plans, including 401(k)s and 403(b)s — which are the main retirement savings for most Americans.
Opening defined-contribution plans to private equity and cryptocurrency exposes Americans' retirement savings to excessive risk, high fees, and potential conflicts of interest. Critics, including lawmakers, consumer advocates, and some financial experts, argue these investments are too risky, volatile, and complex for average savers.
In a letter to the administration, seven Democratic senators, led by Elizabeth Warren and Bernie Sanders, demanded that Americans’ retirement funds be protected from these risky, high-fee investments, saying:
“The Executive Order exposes these hard-earned savings to volatile financial instruments, while attempting to rebrand them as ‘alternative assets,’ although they lack transparency and have exaggerated claims of high returns.”
They note that such investments could lead to irreparable financial harm for millions of Americans, even as the cost of groceries, health care, and housing continues to skyrocket.
Send a message to your representatives urging them to take the next step and introduce legislation to protect retirement funds from these risky investments.
Private equity funds are not good for defined contribution plans because they carry high and complex fees, lack transparency, and may lock up investments for years. Their lack of liquidity and limited oversight make it difficult for workers to assess risk, or to access their savings when they need it most. The risks are increased if retirement plan managers steer clients toward lower-quality, higher-risk funds.
Cryptocurrency is also a dangerous choice for defined contribution plans because it is extremely volatile, difficult to value, and often driven by speculation rather than market fundamentals. Most savers don’t have the expertise to evaluate these assets, and challenges that are unique to crypto — such as hacking and permanent loss of value — are also dangerous.
Lawmakers have also raised concerns about Trump’s potential conflicts of interest, given his strong ties to the crypto industry and the likelihood that he and his family may benefit financially. Even some officials in his own administration have questioned Trump’s policy.
Tell Congress to propose a bill to ensure dangerous private equity groups don’t raid Americans’ retirement funds.
Thank you for fighting to ensure every American knows the risks posed to their retirement savings by Trump’s Executive Order.
Robert Reich
Inequality Media Civic Action
