Offering access to cryptocurrency for retirement plan investors has been a hot topic (as discussed in Multnomah Group’s annual Regulatory Update). Earlier this year, the Department of Labor (DOL) warned against providing access to cryptocurrency, and a week later, Fidelity announced that it would make access to cryptocurrency available through retirement plans.
A new bill supports the use of cryptocurrency and other types of investments for retirement plans. The Retirement Savings Modernization Act seeks to amend ERISA to clarify that plan sponsors can offer alternative investments beyond traditional stock and bond mutual funds.
It should be noted that these investments are currently allowed in retirement plans, so the bill does not change the law. However, if plan sponsors have been reluctant to offer these assets for fear of litigation, the bill seeks to alleviate those concerns. Specific asset classes named are commodities, public and private debt, digital assets (crypto), hedge funds, infrastructure, insured products and annuities, private equity, real assets or real estate-related securities, and venture capital.
If this bill were to become law, it would be a victory for plan sponsors seeking to expand their investment offer beyond traditional stocks and bonds. However, legitimate concerns related to plan participants understanding of the risks associated with these investments would remain. Multnomah Group will continue to monitor both sides of the debate.
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