Department of Labor Withdraws Crypto Guidance, ESG-Era Rule for ERISA Plans

At the end of May, the Department of Labor (DOL) under the Trump Administration announced it would end its defense of former President Biden’s ESG rule and rescind 2022 guidance that expressed the former Administration’s concerns with including cryptocurrency in retirement plan investment menus. The DOL announced it would engage in a new rulemaking effort regarding ESG and investment duties for ERISA fiduciaries, although the timeline is uncertain. According to a Ropes & Gray client alert, “It remains to be seen whether the DOL will revert back to some variation of the ESG-skeptical/pecuniary-factors analysis that the Trump administration adopted in 2020 (or perhaps something even more explicitly antagonistic toward ESG).”

Additionally, the DOL’s announcement that it will rescind the Biden-era cryptocurrency guidance points toward a potential willingness to include alternative assets, including private credit and private equity, in ERISA plans. According to the Ropes client alert, “Now that this guidance has been rescinded, the DOL has made it clear that fiduciaries can determine whether cryptocurrency or any other asset is appropriate for their specific plan participants.” It is important to note that fiduciaries should still consult with their investment advisors and carefully evaluate offerings.

Click here to read a client alert from Ropes & Gray covering the DOL’s recent actions.