- Reportedly, DAiM will act as an advisor and fiduciary in the plan.
- The BTC will be stored in institutional cold storage with Gemini Trust.
- This move will let employees invest BTC in a company and walk away without penalties after quitting.
Digital Asset Investment Management (DAiM), a US-based asset manager, has launched the first-ever employer-sponsored retirement plans that support BTC investment. A press release unveiled this news on November 19, noting that the retirement plans are fully compliant with ERISA. Per the publication, DAiM will act as the plan fiduciary and will be responsible for choosing, managing, monitoring, and benchmarking investment offerings.
Explaining why DAiM decided to introduce BTC-supported retirement plans, DAiM’s COO, Adam Pokornicky said,
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“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. This is a bad deal for savers given the current environment. We believe Bitcoin has demonstrated it has a place in the modern portfolio and individuals should have an opportunity to “Get Off Zero” and invest directly through their retirement account.”
Pokornicky added that DAiM completed the first-employer 401(k) plan in October last year. Since then, the company has been testing this service, a move that allowed it to roll out scalable plans, which provide recordkeeping and administrative fees. He went on to note that the firm takes pride in pioneering regulated investment management services for BTC and that it is excited in offering its fiduciary abilities to provide access to BTC in 401(k) plans.
How the plan works
According to the press release, DAiM will act as an advisor and fiduciary to the plan. In so doing, it will help its clients develop 401(k) plans that provide several endorsed model portfolios of different risk levels to traditional assets and an allocation of up to 10% to BTC. Reportedly, the company will store the BTC safely in institutional cold storage with Gemini Trust, which is the partner for its main investment advisory services.
In the event of an employee leaving one company for another, DAiM claims that their BTC will move with them. Although US citizens have been able to add crypto in their retirement accounts, 401(k) rollovers, and brokerage accounts since 2018, this is the first time company-based plans are allowing it.
Pokornicky noted that,
“The difference is, you can take an old 401K plan and convert it to an IRA when you leave a job or employer to invest in Bitcoin, but it’s never been possible to invest in Bitcoin while working at a company without taking a penalty or quitting your job until now.”
The firm added that if an employee feels the need to allocate more BTC for investment, they can plan an investment consultation with its team. The publication went on to note that DAiM seeks to work with firms of all sizes to help them change plans from their current provider or create a first-time employer-sponsored retirement plan.