The Department of Labor (DOL) is reversing course on its 2022 decision to block digital assets from 401(k) retirement plans. This means that employers may now consider offering crypto as an investment option in their retirement plans.
A U-Turn on Crypto Restrictions
The DOL’s 2022 guidance strongly discouraged the inclusion of cryptocurrencies in 401(k)s, citing concerns about fraud and risk. This was a departure from the DOL’s typically neutral stance on the issue. The new decision overturns that guidance.
Government Overreach?
Secretary of Labor Lori Chavez-DeRemer framed the reversal as a correction of “government overreach” by the previous administration. She stated that investment decisions should be made by financial professionals, not government officials.
No Endorsement, But No Ban Either
Importantly, the DOL isn’t endorsing crypto investments for 401(k)s. They’re simply removing the previous restrictions. The decision also applies to other crypto-related products. The DOL still acknowledges the risks involved with crypto investments.
What This Means for Retirement Savers
This change gives employers more flexibility in designing their 401(k) plans. However, it’s crucial for individuals to understand the risks involved in investing in cryptocurrencies before making any decisions. Always do your own research and consider consulting a financial advisor.
