Crypto investment adviser Digital Asset Investment Management (DAiM) now offers U.S.-based companies the first employer-sponsored 401(k) retirement plans that support Bitcoin, the firm said in a press release.
According to the announcement, DAiM’s new crypto-friendly retirement plans are compliant with the Employee Retirement Income Security Act (ERISA) of 1974. The firm will act as an advisor and fiduciary when creating 401(k)s for companies, which will not only include a varying degrees of exposure to traditional assets, but will allow for the allocation of up to 10% of the funds to BTC. The COO of DAiM, Adam Pokornicky, said in a statement:
“From the moment we were approved by the State of California in June 2018, we’ve seen incredible inbound demand from individuals eager to invest Bitcoin in 401(k)s. Conventional 401(k) plans are restrictive and often lack investment options, causing participants to not only be frustrated but have poor risk-adjusted returns that barely keep up with the rate of inflation.”
In order to ensure the security of the digital asset, all BTC will be held in Gemini Trust’s cold storage custody, which will also allow for employees to transfer their “pension” BTC in the event of a job change. The new offering will also allow for employees to choose a bigger exposure to the digital asset, after a consultation with DAiM.
DAiM is inviting firms of any size to switch plans from their current provider, but has warned that if they want to offer the new product to their employees in 2021, they need to implement the retirement plan by mid-December 2020.
The firm also revealed that it took it one year of testing and building before it was allowed to offer Bitcoin inside company-based plans. While citizens in the U.S. have been able to allocate cryptocurrencies to their individual retirement accounts since 2018, when the IRS started collecting taxes on BTC, it was impossible for companies to provide them with the same service until now.