Media Contact: Barbara M. Fornasiero, EAFocus Communications; barbara@eafocus.com; 248.260.8466
Royal Oak, Mich.— August 6, 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.”
About J.J. Conway Law
J.J. Conway Law, an employee benefits litigation and ERISA firm founded by John Joseph (J.J.) Conway in 1999, represents those seeking full access to the employee benefits they earned and are legally entitled to. The firm has been involved with nationally significant employee benefit, disability and pension cases, including class action lawsuits for such landmark decisions as requiring Michigan private insurers to cover autism health treatments for children through age 18 and protecting the pension rights of City of Detroit employees, police and firefighters as well as Wayne County employees by holding their trustees accountable for investment decisions. The firm’s motto, Conquer Tomorrow®, is dedicated to making the future more secure for their clients across the United States. Learn more on the firm’s website.
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