CLARITY Act Pension Funds 2026: The Retirement Risk Labor Unions Are Raising Before Thursday's Vote

American retirement savings gained a policy-level path to crypto before a statutory framework for governing it cleared Congress. President Trump's Executive Order 14330, signed August 7, 2025, directed the Department of Labor to facilitate digital assets in the 401(k) plans holding more than 90 million Americans' savings, and the DOL published a proposed rule implementing that directive on March 30, 2026.

The legislation that will classify and govern those same assets, the CLARITY Act, is scheduled for its Senate Banking Committee markup on May 14. Five of the country's largest labor unions formally urged senators to oppose it in letters made public on May 12, warning that the bill establishes a framework for the crypto market without the retirement-specific protections workers' accounts need.

What five unions put in writing

The AFL-CIO, which represents more than 12.5 million workers across 60 affiliated unions, sent an email to Senate Banking Committee members warning that without tighter safeguards, mainstreaming digital assets into the economy would advantage the platforms and companies issuing them over the workers whose savings would be at stake.

Four other organizations signed a joint letter to all senators on May 9: the Service Employees International Union, the American Federation of Teachers, the National Education Association, and the American Federation of State, County and Municipal Employees. The letter, first reported by CNBC on May 12, argued that the bill would allow the crypto industry to pursue highly speculative strategies under a regulatory structure that leaves workers and retirees to absorb the consequences of any failures.

The AFT, which counts 1.8 million members including teachers and public employees, had argued in a December 2025 letter that the bill would leave working families exposed to economic volatility without meaningful protection for their long-term retirement savings. Its renewed opposition this week adds the DOL rule as context: workers have a formal, administration-backed path into crypto, and the legislation governing that crypto is the one their representatives are opposing. Senator Elizabeth Warren, Ranking Member of the Senate Banking Committee, has argued that the CLARITY Act would give fintech products built on blockchain the ability to bypass SEC securities oversight, leaving pension funds exposed to gaps that no legislation has yet filled.

How retirement accounts gained crypto exposure

The executive order took effect in August 2025, three months after the DOL had rescinded its Biden-era guidance cautioning 401(k) fiduciaries against crypto. It directed the DOL and SEC to facilitate expanded access to digital assets and alternative investments in employer-sponsored retirement plans, and to do so within 180 days. The proposed rule published March 31, 2026 implements that directive by creating a process-based safe harbor for plan fiduciaries adding alternative assets to their menus.

The rule remains a proposal in a 60-day public comment period closing June 1, 2026. The safe harbor it creates requires fiduciaries to evaluate any digital asset against factors including liquidity, valuation, and regulatory complexity before adding it to a plan menu. The CLARITY Act would codify how digital assets are classified under federal law, determining which of those factors applies to which assets and what a completed prudence review looks like in practice.

What the bill still leaves open

The CLARITY Act's 309-page substitute text, released by Chairman Tim Scott, Senator Cynthia Lummis, and Senator Thom Tillis, makes no provision for barring officials who oversee the crypto market from holding financial stakes in it. Several Senate Democrats have set ethics language as a condition of their support, and the window for filing amendments closed Tuesday evening. The banking industry opposed the stablecoin text on separate grounds, arguing that the activity-based rewards the compromise allows still function too much like interest and would draw deposits away from regulated lenders, and it pressed the same case at the OCC simultaneously.

Chairman Scott has confirmed the markup proceeds regardless. A party-line passage, which Republican-held votes make possible on a 13-11 committee majority, would put the bill on a path to the Senate floor but leave it short of the 60-vote threshold a full Senate vote requires. Polymarket put the odds of the CLARITY Act becoming law in 2026 at 67 to 75 percent as of May 12, reflecting sustained momentum alongside real uncertainty about what Thursday's vote produces.

The markup will determine whether the bill advances to the Senate floor. Labor unions have put into the legislative record a specific description of the gap between two administration policies: the order that opened retirement accounts to crypto, and the legislation that will govern that crypto, were not written to protect the same people from the same risks.

Editor's note

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