Federal News Roundup for July 24, 2025

New Stablecoin Law Likely Has 401(k) Ramifications

On Friday, July 18, President Donald Trump signed into law Senate Bill 1582, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which enables the regulation of stablecoins for payment and other purposes. The White House released a fact sheet in conjunction with the signing.

For employers and their employees, the GENIUS Act likely signals:

The federal government’s growing embrace of cryptocurrency; and,
A growing reason to understand digital assets and their uses.

The new law defines a payment stablecoin as a class of “digital asset that is designed to be used as a means of payment or settlement” that the issuer “is obligated to convert, redeem or repurchase for fixed monetary value” and that the issuer represents “will maintain, or creates the reasonable expectation that it will maintain, a stable value.” Such assets are not federally insured. The law also removes stablecoins from the definitions of “securities, deposits and bank liabilities” within U.S. Securities and Exchange Commission regulations, but includes them in the Bank Secrecy Act for compliance with anti-money laundering regulations.

The GENIUS Act sets forth a process to federally license payment stablecoin issuers, while spelling out standards for reserves, auditing and redemption. Under the law, no entity may issue or sell a U.S.-pegged payment stablecoin unless they are a permitted payment stablecoin issuer (PPSI). Banks, credit unions and non-banks chartered by the Office of the Comptroller of the Currency (OCC) can apply federally; smaller financial technology companies may opt into certified state-level frameworks that meet or exceed federal rules. All these PPSIs must fully back tokens with high-quality liquid assets, keep reserves separate, avoid “rehypothecation” and publish monthly statements of proof.

What does this mean for total rewards professionals?

Primarily, the new law lessens restrictions for cryptocurrency to be included in 401(k) retirement plans. This extends the Trump administration’s push within the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) to undo previously stated concerns by that agency during the administration of then-President Joe Biden.

EBSA on May 28 had rescinded a 2022 compliance release that previously discouraged fiduciaries from including cryptocurrency options in 401(k) plans. The 2022 guidance had directed plan fiduciaries to exercise “extreme care” before adding cryptocurrency to investment menus.

An EBSA press release announcing the guidance rollback stated: “This [2022] language deviated from the requirements of the Employee Retirement Income Security Act [ERISA] and marked a departure from the department’s historically neutral, principled-based approach to fiduciary investment decisions.” The agency stated that, going forward, it will neither endorse nor disapprove of plan fiduciaries who conclude that the inclusion of cryptocurrency assets in a plan’s investment menu is appropriate.

According to research from the Federal Reserve’s Board of Governors, just 8% of Americans said they used cryptocurrency in 2024.

President Trump has said he may soon sign an executive order that would permit federal agencies to explore the use of private-equity and private-capital investments in 401(k) plans. During Trump’s first term, the Department of Labor (DOL) issued an information letter that suggested companies can responsibly offer private-equity investments in target-date funds, provided they carefully consider fees and risk. The Biden-era DOL reversed course, stating it “did not endorse or recommend such investments.”

House Subcommittee Puts EBSA Under the Microscope

The U.S. House of Representatives’ Subcommittee on Health, Employment, Labor and Pensions (HELP) held a hearing on Tuesday, July 22, to examine EBSA’s performance and how the agency may better protect U.S. workers’ retirement savings.

Led by Rep. Rick Allen (R-Georgia), who chairs the subcommittee, the hearing centered on two bills that House Republicans claim would drive greater transparency and accountability within EBSA. The bills, pending action in the House Education and Workforce Committee, are:

The EBSA Investigations Transparency Act (House Bill 2869), introduced by Rep. Lisa McClain (R-Michigan), which would require the agency to submit an annual report to Congress on the status of open investigations.
The Balance the Scales Act (House Bill 2958), introduced by Rep. Michael Rulli (R-Ohio), which would require the agency to disclose all “common interest agreements” it has entered into.

According to Allen, EBSA “ran burdensome and inefficient employee benefit plan investigations that lasted for years with repetitive document requests, staff turnover and delayed findings.”

Andy Banducci, the senior vice president of retirement and compensation policy within the ERISA Industry Committee, remarked that plan audits commissioned by EBSA have taken as long as seven years to complete due to turnover.

According to Rulli, common interest agreements have raised alarms about potential collusion within the agency and its relationship with attorneys who bring plan sponsors to trial.

Ali Khawar, the former principal deputy assistant secretary of EBSA under the Biden administration, stated during the hearing that as of Nov. 7, 2024, only 3% of agency investigations that exceeded 48 months were still active, and over a 15-year span, only 12 investigations had a common interest agreement (a ratio of .04% of all investigations). He added the agency is currently hamstrung since Department of Government Efficiency (DOGE) firings and layoffs have cut a third of its investigative staff.

Trump Nominates Two for NLRB in Effort to Restore Quorum

On Thursday, July 17, President Trump nominated labor lawyers Scott Mayer and James Murphy to fill two of the three vacant seats on the National Labor Relations Board (NLRB).

The NLRB is an independent agency that enforces the National Labor Relations Act by:

Investigating allegations of workplace misconduct brought by workers, unions or employers;
Conducting worker-representation elections; and,
Deciding and resolving cases brought before it.

The NLRB currently has two active members (chair Marvin Kaplan, a Republican appointee, and David Prouty, a Democratic appointee) out of the five available seats and has been without a quorum since Trump’s Jan. 27 removal of Democratic appointee Gwynne Wilcox. Without a quorum, the board is unable to address new labor issues and affirm/reconsider its decisions made during the Biden administration.

Mayer was nominated to fill the seat last held by former member Lauren McFerran, a Democratic appointee whose term expired Dec. 16, 2024. The new term expires Dec. 16, 2029. Murphy was tabbed to fill the seat vacated by former member John Ring on Dec. 16, 2022. The seat’s term expires Dec. 16, 2027.

IRS Raises Health Insurance ‘Pay or Play’ Penalties

The Internal Revenue Service (IRS) announced Tuesday, July 22, it will increase by 15.2% two factors used to formulate employers’ health-benefits-related “pay or play” penalties.

According to IRS Revenue Procedure 2025-26, the penalty-calculation factor increases are:

From $2,900 in 2025 to $3,340 in 2026 for instances where a low-income, full-time employee qualifies for an Affordable Care Act (ACA) exchange subsidy and the employer has failed to provide health coverage for “substantially all” of its full-time employees.
From $4,350 in 2025 to $5,010 in 2026 for instances where an employee who qualifies for an ACA exchange subsidy has not received an offer of affordable coverage with minimum value from the employer.

Employers Would Fund Pensions Under New Sanders Bill

Sen. Bernie Sanders (I-Vermont) on Thursday, July 17, introduced the Pensions for All Act, legislation that would provide retirement coverage to the more than 56 million Americans who currently do not have a retirement plan through their employer.

According to Sanders, nearly half of U.S. workers between the ages of 55 and 64 “have no retirement savings at all and no idea how they will be able to retire.” He stated 22% of American seniors receive less than $15,000 in income per year and half receive less than $30,000.

Sanders said the Pensions for All Act would help address this situation by requiring employers to either:

Provide a traditional pension plan for their workers that is “at least equivalent to the plan provided to new members of Congress under the Federal Employees Retirement System (FERS)”, or
Pay into the federal retirement system at a level that ensures all their workers receive the same amount of retirement benefits as members of Congress.

The bill also would offer reduced contribution requirements for self-employed workers and small businesses.

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