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Service Providers May Allow Investment in Cryptocurrency, but Plan Administrators Should Proceed with Extreme Caution

Recently, one of the country’s largest retirement plan providers announced they were adding a digital assets account to their retirement plan platform that would allow employers to make cryptocurrency, such as Bitcoin, a potential investment option for plan participants.  As we previously reported here, prior to that announcement, the DOL had issued guidance cautioning plan fiduciaries to “exercise extreme care” before adding a cryptocurrency option to a retirement plan’s investment lineup or even through a plan’s brokerage window. The DOL guidance went so far as to say that it expected to investigate plans that offer “participant investments in cryptocurrencies and related products, and to take appropriate action to protect the interests of plan participants and beneficiaries with respect to these investments.” The DOL cautioned that plan fiduciaries who allowed cryptocurrency as a plan investment option “should expect to be questioned” about how their decisions to allow investments in cryptocurrency align with their… Continue Reading

DOL Issues Proposed Rule to Amend the Investment Duties Regulation

The DOL?árecently issued a proposed rule to amend the ?Ç£investment duties?Ç¥ regulation at found at 29 CFR 2550.404a-1 (the ?Ç£Regulation?Ç¥). The proposed rule would provide investment guidance to ERISA plan fiduciaries in light of recent trends in environmental, social, and governance (?Ç£ESG?Ç¥) investing. ERISA requires plan fiduciaries to act ?Ç£solely?Ç¥ in the interest of plan participants and beneficiaries and for the ?Ç£exclusive purpose?Ç¥ of providing benefits and paying reasonable administrative expenses and prudently selecting investments for the plan. In the past, the DOL has periodically issued guidance addressing fiduciary duties under ERISA with respect to ESG-based investment decisions, including Interpretive Bulletin 94-1, which described a ?Ç£tie-breaker standard,?Ç¥ whereby ESG considerations could be the deciding factor when competing investments served the plan?ÇÖs economic interests equally. Later Interpretive Bulletins emphasized that it would be a violation of ERISA to accept reduced returns in favor of ESG goals, but that in certain cases,… Continue Reading

September 2022
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