New Bill Would Bar DOL From Constraining 401(k) Investments

ERISA attorney Fred Reish, partner at Faegre Drinker in Los Angeles, agrees.

"Some legislators, attorneys and private sector businesses are upset that the DOL is expressing opinions on investments and the prudence of particular investments," Reish said in an email message.

The bill, however, is "a political or policy statement and not with any expectation that it will become law," Reish said.

The bill does not effect IRAs, Reish said, "since they are regulated only by the Internal Revenue Code and this [bill] doesn't amend the Code."

While lawmakers' "concerns are real," Reish continued, "there is also a bit of conflict since some of the same people didn't object to the Trump era ESG regulation, which disfavored ESG factor investments. I suspect that it [the bill] was primarily motivated by the DOL guidance on investing in cryptocurrencies. The supplemental guidance on private equity investments could also be part of the motivation."