The Scheme to Scramble Your Nest Egg -- The American Prospect

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https://prospect.org/power/2025-06-13-retirement-crisis-401k-private-equity-scrambled/
by James Baratta, Whitney Curry Wimbish

Private equity and crypto in 401(k)s will not solve the retirement crisis.

You shouldn’t have to be a master investor in your spare time to afford a decent retirement. Policymakers have understood this for decades; that’s why the Employee Retirement Income Security Act of 1974 (ERISA) established minimum standards for private-sector retirement plans, requiring employers to clearly communicate plan information and subjecting them to a fiduciary duty, so advisers operate exclusively in the best interest of their beneficiaries.

ERISA recognizes the “enormous asymmetry of power in these markets,” Corey Frayer, director of investor protection at the Consumer Federation of America, told the Prospect. “There is a strict set of laws about employer-sponsored plans in the fiduciary responsibilities related to those plans, and there is government oversight and enforcement on top of that.” As a result, most 401(k) retirement plans feature a default “plain vanilla” option, with a mix of publicly traded stocks and bonds.

But not everyone is happy with this approach, particularly the financiers in the private equity and cryptocurrency industries who want to get their hands on the over $12 trillion stuffed into worker retirement funds. And they may finally have their opportunity with the Trump administration, the culmination of years of pressure.

. . .

ADDING HIGH-RISK ASSET CLASSES to retirement plan options will do nothing to resolve the real problem facing retirees: the current system is a shambles not fit for purpose. Except for the wealthiest, most Americans do not have enough money to retire on by the time they reach the end of their working lives, as labor economist and retirement security expert Teresa Ghilarducci testified before the Senate last year. Forty-four percent of households with people ages 55 to 64 have no savings at all, said Ghilarducci, who is also a professor of economics and policy analysis and chair of economics at The New School.

In an interview with the Prospect, Ghilarducci said that adding private equity and digital assets to retirement plans will do nothing to correct the incoming retirement crisis, and will likely make it worse.

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[Celerity]

1. It's a bloody shame these superb TAP articles drop like rocks with little to no interaction whilst fake news and misinfo

laden OPs garner hundreds of recs and are ofttimes left up despite many of us debunking the bollocks.

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2. I'm hoping that enough people at least see that they exist and come back to read later.

I agree that a lot of posts are fairly information-free or just personal opinions. I also think that TAP and a lot of other sites I like to read are pretty dense and may not fit into a easy 2 minute glance on a smart phone.