401k Plan Investments SPACs and Cyber-coin Baffle Retirement Committees

401k Plan Auto401k plan investments are at the core of any successful retirement plan.  But, does bitcoin deserve to be in your 401k plan lineup?  Participant contribution rates and the employer contributions are very important.  However, 401k plan investments get a lot of airtime among plan participants.  Do SPACs (Special Purpose Acquisition Companies) belong in a qualified retirement plan?  Asset Retirement Committees seem to be fielding very difficult questions concerning investments today.  Plan participants enjoy discussing investment performance, investment allocations, and investment choices.  Investment choices can also be thought of as the 401k plan investments lineup.

Designing the investment lineup is the responsibility of the retirement plan’s fiduciaries.  In most cases the Retirement Committee will review, select, and monitor the plan’s investment lineup.  Sitting on the retirement plan committee is both an honor and a huge responsibility – especially when plan participants are asking for access to some non-traditional investment options.  Plan Committee members now find themselves fielding very difficult questions from plan participants.  Today, plan participants are asking for access to a broader range of investments.

In reviewing the Investment Policy Statement take a particular interest in the language which describes all investments.  Then, put that IPS through the rigors of using cyber-currency.  Most retirement committee members will glaze-over or freeze when asked to address such asset classes.  With interest rates hovering at historical lows there is still more room for a prolonged bear market in bonds than anything else.  The typical 401(k) investor is not accustomed to losing money in their bond investments.

An annual review of the IPS always makes sense.  One day, will employees have all the traditional investment options available to them and then also be able to trade between Bitcoin investments and SPACs?  It is best for Plan Fiduciaries to always check with the Plan Advisor to run the appropriate analysis on existing asset classes and potential new asset classes.

If your retirement committee would benefit from TPSU’s Retirement Committee Education – please click here.  This includes a one hour instructor led course for your retirement committee.


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