Action 227: Protect Retirement Funds!
Background: On August 7, 2025 Trump issued Executive Order 14330 (EO 14330) to grant owners of self-directed 401K retirement plans access to "investment alternatives" (1). On March 31, 2026 the US Department of Labor published proposed regulations to comply with EO 14330 (2). The "Designated Investment Alternatives" listed in EO 14330 include:
· Mortgage-backed securities and derivative contracts, the very instruments that almost collapsed the entire world economy in 2008.
· Private loan partnerships which many economists think may bring about the next collapse.
· Hedge funds, which have typically charged extremely high fees, are generally illiquid and have historically produced low risk-adjusted returns.
· Digital assets including crypto currencies, which most serous economists consider to be a variety of Ponzi scheme and in which the Trump family are major stakeholders.
· Commodities, the granddaddy of speculative vehicles.
All the "investments" on this list are speculative in nature (forms of gambling) and not real investments in productive assets. Also, in comparison to publicly listed stocks and bonds, they are opaque: that is, information available to investors to assess relevant risks and rewards is limited, or known only to promoters (3). Often the promoters of investment options available to the owners of "self-directed" 401K retirement plans are also the fiduciaries of those plans. The proposed regulations would relieve those fiduciaries from any liability for offering speculative investments to clients, so long as certain proforma procedures were followed.
Extensive economic research over the past 30 years, including that of 3 Nobel prize economists, has concluded that information asymmetry of this sort typically leads to market failures, as happened in 2008. The impacts of such market failures can be systemic, but more often they leave individual investors holding the bag. Rich investors can usually sustain such losses. Individual pensioners usually cannot, and face retirement in poverty.
A sensible change to the proposed rules would limit speculative 401K investment to "qualified investors", defined as those with more than $1 million of investible assets. However, EO 14330 instead promotes a "get rich quick" scheme for small investors, putting the imprimatur of the federal government on the kind of con with which Trump has been fleecing his followers for decades - think Trump University, Trump steaks, vodka, sneakers, watches, cell phones, and Trump crypto.
Actions:
1) Comment on the proposed rule here: https://www.regulations.gov/commenton/EBSA-2026-0166-0001 As of this writing, over 28,000 comments have been submitted. Add your voice!
2) Contact Angus King's office: 207/945-8000 or senator@king.senate.gov to ask if they have commented.
3) Contact the Maine Department of Professional & Financial Regulation - Office of Securities to urge them to comment on the proposed regulations: 207/624-8551
4) Call your union rep to urge them to weigh in.
Urgency: The comment period ends June 1, 2026 at 11:59 PM.
Extra Credit:
(1) Executive Order 14330 of August 7, 2025: Democratizing Access to Alternative Assets for 401(k) Investors
(2) Proposed Rule: Fiduciary Duties in Selecting Designated Investment Alternatives. Posted by the Employee Benefits Security Administration (US Department of Labor) on Mar 31, 2026 https://www.regulations.gov/document/EBSA-2026-0166-0001