401(k) retirement provider ForUsAll filed suit against United States Department of Labor
On Thursday a San Francisco-based 401(k) retirement provider ForUsAll filed suit against the United States Department of Labor (DOL) and Martin Walsh as Labor secretary in U.S. District Court in Washington, D.C. Currently, the firm has assets under management (AUM) of more than $1.7 billion.
ForUsAll sued DOL for planning an investigation into companies that offers crypto investment options to 401(k) holders. The firm said that the regulators had also discouraged employers from planning their retirement using cryptocurrencies. According to the lawsuit filed under APA, the DOL’s attempt to restrict the use of cryptocurrency in defined contribution retirement plans. 401(k) plans offer participants investments in cryptocurrency and related products.
In March 2022 the guidance against incorporating crypto in 401(k) plans was first issued by DOL. The guidance deals with rising awareness regarding the risks like fraud, theft for adding crypto to retirement investment schemes, and lack of regulation for these assets. Other issues were also highlighted including the volatile nature of cryptocurrencies, difficulties in book-keeping, valuation concerns, and economic impacts. Based on these and other concerns as per the guidance at that time 401(k) plans are expected to be investigated by DOL’s Employee Benefits Security Administration (EBSA). Hence setting up an investigative program according to the warning released by DOL. An Administrative Procedure Act (APA) provision that protects against arbitrary official intrusion on private rights is cited by the firm as grounds for withdrawing the DOL compliance assistance release issued in March. Read More…