FOR IMMEDIATE RELEASE: June 1, 2026
CONTACT: Jarice Thompson, jarice@ourfinancialsecurity.org
New AFREF White Paper Details the Risks to Workers’ Retirement Savings from Misguided DOL 401(k) Proposal that Bails Out Private Equity
Washington, D.C. — Today, Americans for Financial Reform Education Fund released a new white paper warning that the Trump administration’s proposal allowing private equity into people’ 401(k) retirement accounts will undermine their retirement security and amounts to a bailout of the private equity industry. The proposal unleashes private equity’s high-fee, opaque, and risky investment model on workers’ retirement savings. AFREF submitted the new brief, The Private Equity 401(k) Trap, as part of its formal comment opposing a Department of Labor (DOL) proposal to open 401(k)s and other defined contribution retirement plans to private equity, crypto, and other so-called alternative assets.
“The DOL should be protecting workers’ retirement savings, not handing them over to the worst Wall Street predators and crypto scammers,” said Oscar Valdés Viera, Senior Policy Analyst for Private Equity and Capital Markets at AFREF. “This proposal would use 401(k)s to bail out a struggling industry and advance the administration’s push to embed crypto deeper into the financial system. Driving workers into the arms of private equity firms and crypto insiders would let the President’s Wall Street and crypto cronies pocket billions at the expense of families’ retirement security.”
The brief documents how private equity is fundamentally unsuitable for retirement accounts. Private equity funds and the companies they own are not subject to the same regular, standardized, public disclosure requirements as public investments. Private fund managers rely on stale and self-interested valuations, layer fees across complex fund structures, lock up investor capital for years, and provide uneven information to different investors. The comment includes a new analysis of employee benefit and retirement plans data in Form 5500 showing that defined contribution plans with virtually no exposure to alternative assets have outperformed defined benefit plans heavily invested in them. Most families saving for retirement are in no position to properly evaluate those risks or to negotiate around them, letting private equity dump the most expensive, worst performing assets on retirement savers.
The proposal would also expose workers to crypto assets that are highly volatile, prone to manipulation, and closely associated with scams, fraud, hacks, and market abuse. The administration’s crypto push is also entangled with serious conflicts of interest, as President Trump and his family have promoted and profited from crypto ventures while advancing policies that would benefit the industry.
“The DOL’s proposal to allow crypto into 401K plans is just another element of the crypto billionaires aggressive deregulatory agenda that would harm investors and retirement savers, including those who didn’t want anything to do with this risky and predatory industry,” said Mark Hays, Associate Director for Crypto and Fintech at AFREF and Demand Progress Education Fund. “This would only deliver economic harm for millions more people when the next crypto crash occurs.”
AFREF urged the DOL to withdraw the proposal and reaffirm that retirement plan fiduciaries must prioritize transparency, reasonable costs, liquidity, prudence, and workers’ retirement security.
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