On April 22, 2022, Lisa Tavares was quoted in Law360 on backlash to the U.S. Department of Labor’s (DOL) recent cryptocurrency guidance for retirement plan fiduciaries. According to the article, the U.S. Chamber of Commerce and other groups sent a letter on April 12 to Ali Khawar, acting assistant secretary for the DOL's Employee Benefits Security Administration, asking that the agency yank a compliance assistance release issued in March. The guidance covers fiduciary obligations involving cryptocurrency in retirement plans regulated by the Employee Retirement Income Security Act.
Much of the business groups' ire was directed at language included in the guidance on allowing crypto investments through brokerage windows, which are accounts within 401(k) plans that allow trading in funds and stocks through an investment broker. The guidance document amounted to "the announcement of a new fiduciary standard with respect to brokerage windows," and "recent sub-regulatory guidance has been more in the nature of rulemaking in need of notice and comment and [Office of Information and Regulatory Affairs] review," the business groups said in their letter.
Benefits attorneys say the guidance set off alarm bells because they've watched brokerage windows grow in popularity, in particular with large group plans, in the absence of clarity from regulators. The last major action from the DOL on brokerage windows was in 2012, when the DOL repealed and replaced guidance that suggested plan sponsors would have to carefully monitor the investments in brokerage windows and potentially include them in fee disclosures.
"While I have cautioned my clients that the Department of Labor has concerns about brokerage windows, they've become commonplace, especially with regard to large plan sponsors," said Tavares. "So to not have settled this issue and this has become predominant in plans, is problematic, that's what people are reacting to."
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