Question: More and more of our employees are asking about the potential to add cryptocurrency options to our retirement plan investment lineup. What is the current regulatory perspective on this?
Answer: On March 10, the U.S. Department of Labor (DOL)published compliance assistance for 401(k) plan fiduciaries who are considering plan investments in cryptocurrencies. Published by the department’s Employee Benefits Security Administration), Compliance Assistance Release No. 2022-01 cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants. The DOL called it an effort to “protect the retirement savings of U.S. workers” and came one day after President Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets. Part of the order instructs the Federal Reserve to explore the development of a U.S. Central Bank Digital Currency.