ForUsAll Sues DOL Over Efforts to Restrict Americans’ Investment Choices
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Lawsuit aims to halt the agency’s overreach and protect Americans’ freedom to choose their own 401(k) investments — including cryptocurrency
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SAN FRANCISCO, June 2, 2022 — ForUsAll — a tech-enabled 401(k) provider that is pioneering the inclusion of cryptocurrency in retirement plans — today filed a lawsuit against the U.S. Department of Labor (DOL) in federal court in Washington, DC. The complaint seeks to prevent DOL from restricting the types of investments everyday Americans can choose to make within a self-directed brokerage account (SDBA). This lawsuit aims to protect hard-working Americans’ freedom to choose how they diversify their investments in their pursuit of a secure and comfortable retirement.
A copy of the complaint can be accessed here.
On March 10, the DOL issued a release discouraging employers from adding a cryptocurrency option to their 401(k) plan and threatening to investigate those who did. In the complaint, ForUsAll asserts the department had no legal authority or existing precedent to support such actions, and contends that this guidance was issued suddenly and without engaging in the appropriate “notice and comment” rulemaking process — in direct violation of the Administrative Procedure Act.
“For decades, self-directed brokerage accounts have played a key role in giving 401(k) holders access to a broader range of investments than what is offered by their employers’ core fund lineup,” said Jeff Schulte, Chief Executive Officer of ForUsAll. “But now the DOL is trying to change the rules overnight, attempting to restrict the types of investments individuals can choose to make, despite having no legal authority to do so — all because they don’t like a single asset class. We won’t stand by while they restrict everyday Americans’ ability to make the most of their hard-earned money.”
ForUsAll believes the DOL’s overreach, as described in the complaint, sets a troubling precedent. While cryptocurrency may be the department’s target today, this action — if left unchecked — could embolden the agency to ban other investment types or strategies in the future, in a similarly arbitrary fashion. Accordingly, the complaint asks the court to vacate and set aside the release and enjoin the DOL from acting to implement it, all in accordance with the limits on its regulatory authority.
“The DOL plays several important roles that serve American workers — but ‘armchair financial adviser’ shouldn’t be one of them,” said Schulte. “Congress never gave government officials the power to pick winners and losers, let alone the legal authority to arbitrarily restrict entire asset classes. And it certainly never authorized agencies to take such sweeping and abrupt action with no public process. The DOL should leave it to the professionals to help everyday Americans make the best possible decisions for their financial future.”
As cryptocurrency continues to gain widespread adoption among institutional investors and those with the means to invest outside of their 401(k), ForUsAll agrees with President Biden’s recent executive order that it is imperative for everyday Americans to have the opportunity to share in the benefits of this transformative technology, if they so choose.
In June 2021, ForUsAll became the first retirement plan provider to introduce a responsible solution to incorporate cryptocurrency investments in 401(k) plans. The company believes the 401(k) — which is the primary investment vehicle for working people — offers the best way to expand access. ForUsAll’s Alt401(k) platform not only expands access, but implements education, guidance, and guardrails to safeguard investors’ hard-earned retirement savings, including by requiring participants to pass an interactive quiz on the potential risks associated with cryptocurrency and by capping cryptocurrency allocations at 5% of the investor’s overall portfolio.
“Just as Congress did when they endorsed the right of individual 401(k) participants to direct their own accounts, we believe that everyday Americans have the right to make their own financial decisions,” said David Ramirez, ForUsAll’s Chief Investment Officer. “At ForUsAll, we see it as part of our mission to provide savers with education, guidance and guardrails as they navigate their path to retirement. We have a proven track record of empowering our plan participants with common-sense solutions that balance smart investment opportunities with robust investor protections — and we will continue to prioritize that as we roll out our Alt401(k) platform.”
For more information about ForUsAll, visit www.forusall.com.
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About ForUsAll
ForUsAll is a tech-enabled 401(k) provider that is pioneering the inclusion of cryptocurrency in retirement plans. Founded in 2012 by the same team that helped build Financial Engines, the largest registered investment advisor in the country, ForUsAll’s mission is to provide everyday Americans with the tools they need to build a brighter financial future. With $1.7B in assets under management, ForUsAll serves more than 80,000 retirement savers across over 500 plans, and is trusted by businesses that insist on a 401(k) experience their employees will love.
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