Takeaway
- The 2025 CAR does not alter ERISA's substantive fiduciary standards and considerations but eases the DOL's previously hostile enforcement stance toward cryptocurrency and similar digital assets in 401(k) plans, restoring a "neutral" DOL enforcement approach. 401(k) plan fiduciaries must still consider all relevant ERISA factors and apply the necessary care, skill, prudence, and diligence required by ERISA in managing their 401(k) plan fund lineup. They can now feel more assured that a decision to include cryptocurrency in their 401(k) plan will not be subjected to increased scrutiny by the DOL; however, they must remain vigilant regarding the risk of potential participant claims and class actions.
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On May 28, 2025, the DOL released Compliance Assistance Release No. 2025-01. The 2025 CAR rescinds the DOL's previous Compliance Assistance Release No. 2022-01 (2022 CAR), issued in 2022, which indicated an unfavorable DOL enforcement stance on including cryptocurrency and similar digital assets in 401(k) plan fund lineups.
In rescinding the prior guidance, the DOL states that the 2022 CAR articulated a standard of care that was inconsistent with ERISA's fiduciary principles, and that the 2025 CAR "restores the [DOL's] historical approach by neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan's investment menu is appropriate."
The DOL further reminds plan fiduciaries that, "[w]hen evaluating any particular investment type, a plan fiduciary's decision should consider all relevant facts and circumstances and will "necessarily be context specific", and that fiduciaries must "curate a plan's investment menu 'with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims' for the 'exclusive purpose' of maximizing risk-adjusted financial returns to the plan's participants and beneficiaries."
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