Can Your Retirement Plan’s Investment Menu Include Crypto?

The Department of Labor (DOL) is once again taking a neutral stance on offering a certain investment option to retirement plan participants: crypto.

During the Biden administration, the DOL issued Compliance Assistance Release 2022-01, warning 401(k) plan fiduciaries against cryptocurrencies. Plan fiduciaries should use “extreme care” before adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants, the DOL said in the 2022 release.

But now, the DOL has rescinded the earlier guidance in full.

The Employee Retirement Income Security Act (ERISA) doesn’t include a standard of “extreme care,” the DOL pointed out in Compliance Assistance Release 2025-01, issued May 28, 2025.

That said, no matter what the type of investment, the bar is high under ERISA. Fiduciaries must act with “care, skill, prudence, and diligence,” the law states.

The agency further clarified in the 2025 guidance that it neither endorses nor disapproves of plan fiduciaries who decide that including cryptocurrencies in investment menus is appropriate.

The DOL also noted that the same reasoning and principles apply to other digital assets such as tokens, coins and crypto assets.

Retirement Plan Choices

Of course, before employees can make decisions about how to invest their defined contribution plan funds, they have to take the first step of enrolling.

Some employees may need a lot of help throughout the entire process — from enrollment to making investment choices. A handful of them may even wind up on your missing participant list someday.

Other employees will want to take more initiative.

According to a 2025 report from the Defined Contribution Institutional Investment Association, there are three tiers that plan sponsors typically adopt when they structure their retirement plan’s investment menu.

The report, Investment Menu Influences in Defined Contribution Plans: Considerations for Plan Sponsors, describes those tiers as follows:

Tier 1: Do It For Me. Employees in this group take a hands-off approach. They benefit from automatic enrollment, and they’re likely to end up with the plan’s default investment choice, officially called the qualified default investment alternative.

Tier 2: Help Me Do It. With plan participants in this tier taking a more active role in managing their retirement savings, Sec. 404(c) of ERISA comes into play. This provision of the law offers a safe harbor for plan fiduciaries who meet certain requirements. Employees in this group are seeking to balance their individual risk tolerances and financial goals.

Tier 3: Do It Myself. Plans may add additional investment choices for their most hands-on retirement plan participants. That might include individual stocks and bonds, offered through a self-directed brokerage account, the report explains.

With all three of these tiers, keeping tabs on legal, legislative and regulatory changes is essential.