Everyone is talking about cryptocurrencies it seems, and participants of 401(k) plans are no exception.
Recently, federal authorities have announced that cryptocurrencies might not mesh with current standards for employee 401(k) plans and asked participants and fiduciaries to take care with investments.
In March 2022, President Joe Biden signed an executive order on cryptocurrency. As it stands, the order doesn’t change too terribly much. However, the order does ask for cryptocurrency to be studied by various federal agencies – meaning new laws on it could come in the future.
Federal authorities are, however, warning employees to be careful when adding cryptocurrency options to 401(k) plans.
There is no ban by the Employee Benefit Security Administration but fiduciaries planning to add crypto options will need to thoroughly evaluate and study it before it becomes reality.
EBSA can investigate employee benefit plans, so as to protect those who participate in them. Fiduciaries have a sacred trust to act in the best interest of investors – it remains to be seen if crypto qualifies.
EBSA will be focusing on a few issues, as they relate to cryptocurrencies: It’s volatility, valuation and recordkeeping of digital assets. Crypto has many differences from tradition investments and assets.
So, what can you do? It’s always a good idea to learn all you can about cryptocurrencies, keeping close tabs on your 401(k) options and offerings.
Crypto is something that evokes strong feelings in many and some believe it should not be regulated at all. Critics of cryptocurrencies say it has ties to criminal activities and terrorism and can be a breeding ground for scams and fraud – advocating for more government regulation and oversight.
Do you still have questions about retirement planning options, 401(k) plans or cryptocurrency?
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