Labor Unions Reject Crypto in Pensions

Public pension funds lost more than $330 million to cryptocurrency volatility in the first half of 2024. AFSCME and allied labor unions are opposing the CLARITY Act to prevent similar losses in worker retirement accounts.

The proposed legislation would lower barriers for unstable digital assets to enter 401(k) and pension portfolios. This exposure would occur regardless of whether individual workers choose to invest in crypto.

Regulatory Shift Undermines Protections

The CLARITY Act would transfer oversight from the Securities and Exchange Commission to the Commodity Futures Trading Commission. The CFTC is currently understaffed and underfunded compared to the SEC.

The bill also preempts state-level protections against cryptocurrency scams. This change reduces the regulatory framework that currently guards investor interests.

Retirees Cite Income Stability

Frank Weglarz, president of AFSCME Retirees Subchapter 120, emphasized the need for predictable income. He stated that crypto volatility creates unacceptable risk for those relying on pensions to pay bills.

Retirees view stable portfolios as essential for financial security. Introducing high-risk assets threatens the long-term viability of retirement income for millions of workers.

Systemic Risk to Economy

AFSCME argues the bill sets the stage for a broader financial crisis. The union warns that a crypto collapse would harm state budgets and public services.

According to GN markets/crypto (en-US), the lobby is pushing for these changes to expand industry reach. Labor groups counter that this approach prioritizes corporate gains over worker stability.