Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Cryptocurrency»New DOL Guidance for Retirement Plans on Cryptocurrency and ESG Investments | Patterson Belknap Webb & Tyler LLP
    Cryptocurrency

    New DOL Guidance for Retirement Plans on Cryptocurrency and ESG Investments | Patterson Belknap Webb & Tyler LLP

    June 10, 20254 Mins Read


    The new administration has recently taken steps to revise guidance with respect to two retirement plan investment options: cryptocurrency, and funds focusing on environmental, social, and governance (“ESG”) factors. These two topics have been hotly debated over the past few years, and it is not surprising that the new administration would choose to address them early in its term. The recent changes are highlighted below.

    Background

    Cryptocurrency

    In March of 2022, the Department of Labor (the “DOL”) released Compliance Assistance Release No. 2022-01 (the “2022 Release”). The 2022 Release specifically cautioned plan fiduciaries to “exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants” and cited, among other issues, concern regarding the prudence of permitting direct investment in cryptocurrencies due to significant risk of fraud, theft, and loss.

    ESG Investments

    Over time, administrations have taken markedly different positions with respect to the permissibility of including investments with ESG factors as options in retirement plans. In late 2022, the prior administration released amended regulations (the “2022 Regulations”) rolling back regulations issued in 2020 which discouraged the use of ESG-focused funds as plan investments (the “2020 Regulations”). The 2022 Regulations generally clarified that decisions regarding retirement plan investments must be based on factors that a fiduciary reasonably determines are relevant to a risk and return analysis, and that this analysis may include ESG factors, provided that the weight given to any factor, including ESG factors, should appropriately reflect a reasonable assessment of its impact on the risk-return analysis. (The 2022 Regulations are summarized in greater detail in our prior alert.) In response, several oil and gas related parties as well as 26 states sued the DOL to vacate the 2022 Regulations (Utah v. Chavez-DeRemer, 5th Cir., No. 23-11097). In late April 2025, the Fifth Circuit was informed that the DOL intended to reconsider the 2022 Regulations and the possibility of recission of those regulations was specifically mentioned.

    Updates

    New Guidance on Cryptocurrency Investments in 401(k) Plans

    Late last month, the DOL issued Compliance Assistance Release No. 2025-01 (the “2025 Release”). The 2025 Release indicates that the standard of “extreme care” directed under the 2022 Release was not included in the Employee Retirement Income Security Act (“ERISA”) and differed from ordinary fiduciary principles established under ERISA.

    The 2025 Release posits that, prior to the 2022 Release, the DOL’s position on types of investments or investment strategies had usually been neutral. The 2025 Release purports to return to this neutrality, “neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate.” The 2025 Release cites Fifth Third Bancorp v. Dudenhoeffer when reiterating that plan fiduciaries’ investment menu decisions should include consideration of “all relevant facts and circumstances” and will be “context specific”.[1]

    DOL’s Plans to Engage in Rulemaking on the ESG Rule

    On the same day, the Department of Justice (DOJ) provided a letter to the Utah v Chavez-DeRemer court indicating that the DOJ intends to engage in new rulemaking on the subject of the challenged regulations. This rulemaking is expected to be included in the DOJ’s Spring Regulatory Agenda, and the DOJ indicated in its update that it will move through the process “as expeditiously as possible”. This update signals that the 2022 Regulations are likely to be modified or rescinded through the formal rulemaking process.

    Takeaways

    Cryptocurrency

    Although the 2025 Release is a significant departure from the previous guidance, it explicitly stops short of endorsing the inclusion of cryptocurrency in 401(k) plan investment menus. Therefore, under current guidance, plan fiduciaries will be required to make their own judgment regarding the prudence of including such an investment option. As with any other fiduciary decision, the fiduciary should be sure to act solely in the interest of plan participants and beneficiaries, and with the care, skill, prudence and diligence that a prudent person familiar with such matters would use under similar circumstances. Furthermore, any decisions regarding plan investment options should be made by the appropriately authorized parties, and carefully documented.

    ESG Rule

    The DOJ’s notice to the Fifth Circuit did not indicate what would be included in the new regulations, simply that it would engage in the rulemaking process this spring. Given the history of these regulations, it appears likely that the new regulations will be more closely aligned with the 2020 Regulations. More information is expected to become available in the near future.


    [1] Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014).



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    Digital Currency Coming to Pakistan: SBP Confirms Pilot Launch Plan

    Cryptocurrency

    Pakistan to launch digital currency? Here’s all you need to know

    Cryptocurrency

    SBP plans pilot for digital currency – Newspaper

    Cryptocurrency

    Cryptocurrency News Live: Bitcoin, Ethereum, Solana prices today; memecoin updates

    Cryptocurrency

    Pakistan plans digital currency pilot

    Cryptocurrency

    RBA pushes ahead with stablecoin and digital currency trials — Capital Brief

    Cryptocurrency
    Leave A Reply Cancel Reply

    Top Picks
    Cryptocurrency

    India To Use Cryptocurrency For Trade, Abandon US Dollar

    Commodities

    Eastern Cape revives agricultural shows to boost smallholder farmers market

    Fintech

    BofA Grows AI Patent Portfolio 94%, Leading Financial Innovation

    Editors Picks

    Tim Minall – L’Agefi

    April 24, 2025

    Ces bijoux fabriqués en Pologne durant l’âge du bronze ont été forgés avec un métal extraterrestre !

    February 19, 2025

    USDA Offers Disaster Assistance to Agricultural Producers in Illinois Impacted by Recent Tornadoes, High Winds & Flooding

    July 29, 2024

    Renewable energy targets will be missed, consultants say

    August 7, 2024
    What's Hot

    Chip Stocks Fall While Energy For AI Moves Into Spotlight

    October 16, 2024

    Missouri Amendment 1 Election Results 2024: Exempt Childcare Property Taxes

    August 7, 2024

    Justice Department Disbands National Cryptocurrency Enforcement Unit

    April 8, 2025
    Our Picks

    Caribbean Utilities (OTCMKTS:CUPUF) Stock Price Passes Below 200-Day Moving Average – What’s Next?

    March 13, 2025

    Billionaire Israel Englander Is Selling Nvidia and Palantir and Piling Into a Historically Cheap, Yet Potentially Troubled, Artificial Intelligence (AI) Stock

    October 14, 2024

    Hank Payments signs LOI to acquire tech company for USD 5.2 mln

    August 21, 2024
    Weekly Top

    Cryptocurrency News Live: Bitcoin, Ethereum, Solana prices today; memecoin updates

    July 9, 2025

    Kamoa Copper lance un centre d’excellence pour former des ingénieurs locaux

    July 9, 2025

    This 6.1% Monthly Dividend Stock is a Cash Flow Machine

    July 9, 2025
    Editor's Pick

    Huddlestock Fintech nomme une nouvelle directrice financière

    June 30, 2025

    MobiKwik’s inspiring journey spotted on Bharat FinTech Story on Disney+ Hotstar

    August 24, 2024

    C’est l’un des jeux préférés du créateur de Metal Gear et Death Stranding, et il est gratuit avec le Nintendo Switch Online

    May 4, 2025
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.