Key Takeaways
- • Fidelity, the nation's largest 401(k) provider, said on Tuesday, April 26, 2022, that its plan participants will be able to put a portion of retirement savings into Bitcoin, provided their employers opt in.
- • Fidelity held $2.4 trillion in 401(k) assets in 2020, more than a third of the market, according to Cerulli Associates, per the New York Times.
- • The digital assets account carries a fee of 0.75 to 0.90 percent of assets, plus a trading fee the firm has not yet disclosed and describes as "competitively priced."
- • The account will be available in the middle of 2022, and allocations will be capped at 20 percent, although employers set a lower ceiling and the cap could change.
- • The launch comes weeks after the Department of Labor said it would scrutinize plans that add digital assets to their investment menus.
Summary
Fidelity Investments, the nation's largest provider of 401(k) plans, said on Tuesday that it would allow its participants to invest a portion of their retirement money in Bitcoin, subject to employer approval, according to the New York Times. The firm said it is introducing a digital assets account that will hold Bitcoin and be integrated into the 401(k) investment menu alongside traditional mutual funds. Fidelity expects the account to become widely available in the middle of 2022.
Fidelity held $2.4 trillion in 401(k) assets in 2020, or more than a third of the market, according to the research firm Cerulli Associates. The account fee will range from 0.75 percent to 0.90 percent of assets, depending on factors including the employer and the amount invested. An additional trading fee has not yet been disclosed.
Participants may elect to direct a percentage of their contributions to the Bitcoin account. Employers will set the ceiling, but the platform will not permit allocations above 20 percent, a limit that could change. MicroStrategy, the business analytics firm whose chief executive is a prominent Bitcoin proponent and has invested heavily in the currency, has already signed on. Dave Gray, head of workplace retirement offerings and platforms at Fidelity Investments, said in an interview that Fidelity is in discussions with employers across different regions of the country, and that plan sponsors had shown growing interest "organically" in offering digital assets in retirement plans.
The announcement faces regulatory headwinds. Last month, the Department of Labor, which oversees workplace retirement plans, said it would closely examine plans that added digital assets to their investment menus, according to the New York Times.
Fidelity held $2.4 trillion in 401(k) assets in 2020, or more than a third of the market, according to the research firm Cerulli Associates. The account fee will range from 0.75 percent to 0.90 percent of assets, depending on factors including the employer and the amount invested. An additional trading fee has not yet been disclosed.
Participants may elect to direct a percentage of their contributions to the Bitcoin account. Employers will set the ceiling, but the platform will not permit allocations above 20 percent, a limit that could change. MicroStrategy, the business analytics firm whose chief executive is a prominent Bitcoin proponent and has invested heavily in the currency, has already signed on. Dave Gray, head of workplace retirement offerings and platforms at Fidelity Investments, said in an interview that Fidelity is in discussions with employers across different regions of the country, and that plan sponsors had shown growing interest "organically" in offering digital assets in retirement plans.
The announcement faces regulatory headwinds. Last month, the Department of Labor, which oversees workplace retirement plans, said it would closely examine plans that added digital assets to their investment menus, according to the New York Times.
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