In 2022, the Biden administration warned retirement plan overseers about including cryptocurrencies in 401(k) plans, citing the complexities and risks involved. However, the Trump administration recently rescinded this guidance, adopting a neutral stance on crypto investments. Labor Secretary Lori Chavez-DeRemer criticized previous overreach, advocating for fiduciaries to make investment decisions without federal bias. Despite this shift favoring crypto, experts suggest that there's hesitance among retirement plan administrators to include digital assets due to potential legal repercussions, with minimal appearances of crypto options in the retirement sector at present.
In 2022, the Biden administration's retirement plan regulators placed a warning sign on cryptocurrencies, urging plan overseers to exercise extreme care before making digital coins available inside 401(k) plans.
The Labor Department, which oversees retirement plans, said on May 28 that it would adopt a neutral stance toward crypto, neither endorsing nor disapproving of plan managers who decide to include digital assets on 401(k) investment menus.
Retirement plan administrators who must act solely in the best interest of the participating employees are still responsible for choosing prudent investment options.
Many fear being sued for far more conservative choices than crypto, plan experts say, and so far, the appearance of digital assets inside 401(k)s has been minimal.
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