Media Contact: Barbara M. Fornasiero, EAFocus Communications; barbara@eafocus.com; 248.260.8466
Royal Oak, Mich.— August 5, 2025— Employee benefits and ERISA attorney and litigator John Joseph
(J.J.) Conway of Michigan-based J.J. Conway Law is not waiting for the current administration to
officially release executive orders and regulatory advisories allowing 401k accounts to invest in new
retirement products before he calls out the move as risky.
“Allowing employees to invest their retirement savings in cryptocurrencies, alternative investments like
private equity and hedge funds, and precious metals is a seismic and risky shift in U.S. public policy,”
Conway said. “With alternative investments, for example, the standard management fee on private
market investments is 2%, plus a 20% annual charge on all profits. There may be other fees as well,
along with withdrawal restrictions that can limit the ability to withdraw money for as long as ten years.
At a time where retirement savings have already shifted dramatically from employer plans to individual
accounts, we need to be strengthening -not loosening – investment parameters for individual investors.”
Conway questions how this new selection of retirement investment options will work from a practical
standpoint, given the obvious administrative challenges and the fact that alternative investment
products have traditionally been legally restricted to institutional investors and wealthy individuals.
“How will these new private investments be sold to new investors, and how will they be priced? Most
alternative investments are limited partnerships – how will that change? Alternative investments also
rely on secondary markets to offload underperforming assets or to quickly extract cash. How will that
work? How will cryptocurrencies be priced ten years from now? These are just a few practical yet
complex considerations that can’t be fully answered or addressed unless there is a pause in the action
now,” Conway said.
He also questions the appropriateness of the management fees charged and what type of liquidity will
be available for savers and retirees. Because cryptocurrencies rely upon a purely market valuation
(whatever someone is willing to pay is the price,) the management fee structure of both types of
investments will have to be created. Further, in recent years, extensive litigation has been filed against
employers for selecting investment options that were high cost.
“Many successful lawsuits have been brought against benefit plans arguing that the management fees
charged on investment accounts were excessive. Similarly, many large institutional investors, like Yale
University and the University of California, are trying to exit private markets,” Conway said. “They have
been forced to offload their private equity and hedge fund investments into the secondary market,
reportedly at some discount, or in some cases pairing their most valuable investments with their
underperforming ones to attract buyers. That should serve as sufficient warning.”
Particularly concerning to Conway as an ERISA attorney is the threat these proposed moves present to
ERISA’s fiduciary duty to retirement savers in 401k plans, especially considering that even the SEC put
limits on who could deploy funds into these types of investments.
“ERISA went into effect 50 years ago this year and has been instrumental in protecting the rights of
employee investors,” Conway said. “To avoid a conflict with offering cryptocurrencies or alternative investments in employee benefit plans, the administration is floating safe harbor rules that might
alleviate employer plan sponsors from fiduciary liability for offering such funds. That’s a troubling
development and I think it will be a hard sell to defend the cost and suitability of these investments for
the average saver under ERISA rules.”
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