Fidelity Investmentsthe largest 401(k) retirement plan manager in the United States, will let its clients choose to keep their money in Bitcoin (BTC), but only if their employer allows them to.
401(k) plans are employer-sponsored defined contribution retirement plans. Fidelity, according to 2020 figures compiled by the researcher Cerulli Associates, has $2.4 trillion locked in 401(k) accounts. This figure, underlines the New York Times, represents more than a third of the national market.
On its website, Fidelity explained that this “new exclusive offer” would be called Digital Assets Account and that, for businesses, it could allow employees to invest in digital assets, including Bitcoin. She says she developed this new offering “as part of Fidelity’s holistic digital asset services.”
Account fees will be between 0.75% and 0.9% of assets, adds the New York Times, but this “will depend on several factors, including the employer and the amount invested.”
Besides, “additional trading fees” will also be applied. Details of the fee have yet to be announced, but a company spokesperson reportedly said the fee would be “competitive”.
Dave Grayhead of workplace retirement offerings and platforms at Fidelity, reportedly said:
“We’ve seen growing interest from employers, organically, in how bitcoin or digital assets could be offered in a retirement plan.”
Media outlet Wealth Management added that the offer would be made “widely available” to employers by mid-2022.
The firm said on its website that investors will have access to these digital asset accounts, which “mainly hold bitcoin plus short-term money market investments.”
But it will be the employers who will have the final say in choosing these types of accounts and setting contribution and conversion limits on them.
Employees will also receive Bitcoin education materials “to help them make informed decisions,” the firm said.
The New York Times suggests that regulators “have already signaled their skepticism about the idea”, noting that in March this year, the Department of Laborwhich governs this space, “said it would critically follow pension funds that add digital assets to their investment plans.”
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