Risky Business: The DOL's Neutral Stance on Crypto and Private Equity in 401(k)s

The U.S. Department of Labor's (DOL) recent shift to a “neutral” regulatory stance on cryptocurrency and private equity in 401(k) plans has opened the floodgates for employers to offer these high-risk assets to retirement savers. While this policy change champions fiduciary freedom, it also raises critical questions about whether retirement plans—designed to provide long-term financial stability—are being weaponized as vehicles for speculative investments. For investors, the path forward is clear: prioritize diversification, demand transparency, and avoid the siren call of volatility.

The Regulatory Tipping Point: Neutral Doesn't Mean Safe

In May 2025, the DOL rescinded its 2022 guidance that had cautioned employers against including cryptocurrency in 401(k) plans. The new Compliance Assistance Release No. 2025-01 signals a retreat from proactive oversight, leaving fiduciaries to navigate risks like fraud, price volatility, and illiquidity without clear guardrails. While the DOL insists this shift aligns with ERISA's principles of prudence and loyalty, the reality is stark: no safe harbor protections exist for these assets.

Cryptocurrency exemplifies the problem. A glance at Bitcoin's price swings—plunging 70% during the 2022 market crash before rebounding—reveals its instability. Private equity, meanwhile, suffers from opacity: . High management fees (often 2% + 20% performance splits) and multiyear lock-up periods make these assets a poor fit for retirement plans, where liquidity and steady growth are paramount.

The Hidden Costs of “Regulatory Neutrality”

The DOL's hands-off approach may seem libertarian, but it shifts risk squarely onto retirees. Fiduciaries now face a dilemma: include volatile assets to avoid accusations of overreach, or exclude them and risk lawsuits for failing to diversify. The Ninth Circuit's 2025 Intel ERISA ruling—which absolved fiduciaries of liability for including private equity—highlights the legal minefield. Even well-intentioned decisions can spark costly litigation if markets sour.

For savers, the stakes are existential. Consider a 50-year-old worker nearing retirement: a crypto crash or private equity lock-up could derail their financial security. Yet, the DOL's stance offers no recourse. As one legal expert noted, “Neutral isn't neutral when it means participants bear the burden of fiduciaries' experimental choices.”

How to Protect Your Retirement: Three Steps

1. Audit Your Plan's Options: Demand detailed disclosures on any crypto or private equity offerings. Ask:
2. What are the fees, liquidity terms, and historical performance?
3. How does this align with my retirement timeline?

4. What safeguards exist against fraud or market collapse?

5. Diversify with Purpose: Avoid all-or-nothing bets. Pair volatile assets with stable instruments like annuities, which guarantee lifetime income. The shows their reliability in low-interest-rate environments.

6. Advocate for Transparency: Push employers to adopt plans with ERISA-compliant safeguards. This includes:

7. Independent third-party audits of alternative investments.
8. Clear exit strategies for illiquid assets.
9. Participant education on risk vs. return trade-offs.

The Bottom Line: Prudence Over Popularity

The DOL's neutral stance is a double-edged sword. While it empowers fiduciaries to innovate, it also demands savers to act as their own gatekeepers. For those tempted by the promise of crypto's returns or private equity's diversification, remember: retirement plans are not trading accounts. Prioritize stability, demand accountability, and reject the illusion of “free” risk.

Your future depends on it.