Department of Labor Position on Cryptocurrency Investment in 401(k) Plans

Practical and Legal Considerations

Sheldon M. Geller, , JD, CPA

Many 401(k) plan sponsors mistakenly believe that they have no liability for investment fund options made available to participants in core investment menus and self-directed brokerage accounts. Also, many plan fiduciaries mistakenly believe that they have delegated investment fund selection and ongoing performance monitoring responsibility to their investment advisor. But in reality, regulatory investigations and participant lawsuits are brought upon and against employers and plan fiduciaries for, among other reasons, imprudent investment options; courts and regulators have routinely held plan sponsors liable to restore participant accounts [see 401(k) Lawsuits: The Causes and Consequences, The Center for Retirement Research at Boston College, May 2018].