(K)rypto?

Sponsored by MFS Investment Management. 

Last year the Labor Department issued a “Compliance Assistance Release” regarding the inclusion of cryptocurrency in 401(k) plans – we asked members at that time in a QOTW if they would consider Cryptocurrency as an investment option in their plans and though a handful were considering it, the overwhelming majority were not.

The Government Affairs Office (GAO) is now studying this issue and reached out to us for data. Though we felt that, if anything, plan sponsor interest in these funds declined in the last year with the volatility in crypto, we wanted to data to confirm/refute this and to trend interest over time. Turns out – 99.2 percent of plan sponsors (still) do not believe crypto belongs in 401(k) plans, though (only) one respondent is considering it. Comments follow:

• As a non-profit organization, we are limited to investments with proven track record.
• Crypto is pure speculation, not an investment. You cannot analyze it to determine future value. Like stocks and bonds, or even commodities. Crypto has no place in retirement investment accounts.
• Haven't really considered it.  It's still a bit of an enigma to us and our participants.  We're not 100% comfortable with it.
• Haven't really discussed it as an option for our Plan
• I am too skeptical. There is just not enough legislation and I am nervous participants are just not educated enough that this is a viable option.
• it is too volatile; does not belong under a fiduciary's responsibility.
• It's not so much that it's viable or not - it's just not prudent in its current iteration.
• No plans to add crypto, as it's too volatile and not proven.
• Not a good prudent rule decision.
• Not recommended by our plan advisor.
• Still seems too speculative to include as a staple for the investment portfolio.  That said, since our plan provides a brokerage option, individuals could still use that platform to invest on their own in this vehicle.
• The events of the past year have, if anything, affirmed my original concerns.  and then some.
• This is not a fiduciary responsible investment for a 401k plan.
• We are a very conservative company so our offerings reflect that.
• We are concerned with excessive volatility.
• We do not view Crypto as a good investment for our plan.
• We don't view Crypto as a stable investment to offer employees
• We never considered crypto as a viable investment option within our 401k Plan.
• We stick to our IPS and they don't make the cut. We have a brokerage window if a participant feels strongly about investing in ESG on an individual level. We also believe individuals can make this choice in their own IRAs or personal investing.