DAiM launched the first employer-sponsored pension plans supporting investments in Bitcoin
Digital Asset Investment Management, or DAiM, a US asset manager, has launched the first 401(k) employer-sponsored retirement plans supporting Bitcoin (BTC).
According to an announcement on 19 November, DAiM will act as a consultant and trustee to help companies “create a 401(k) plan that offers several recommended model portfolios, with various risks on traditional assets and an allocation of up to 10% in Bitcoin”.
BTCs will be stored in cold storage by Gemini Trust, allowing DAiM to transfer Bitcoin to employees leaving participating companies.
DAiM’s crypto-friendly pension plans comply with the Employee Retirement Income Security Act of 1974, and may be offered by employers from 2021.
U.S. citizens have already been able to include Bitcoin Freedom crypto assets in their individual pension accounts, 401K rollovers and brokerage accounts since the Internal Revenue Service began taxing Bitcoin in 2018. However, Adam Pokornicky, chief operating officer of DAiM, explained to Cointelegraph that “it was impossible to offer Bitcoin within business plans:
“The difference is that you can take an old 401K plan and convert it into an IRA when you leave a job or company to invest in Bitcoin, but until now it was not possible to invest in Bitcoin working in a company without incurring penalties or being forced to fire you”.
Pokornicky pointed out that traditional wealth management sectors have been “slow to familiarize themselves with Bitcoin,” adding:
“There are very few investment advisors who offer authorized and regulated access to Bitcoin directly into brokerage and retirement accounts.
In his view, the industry’s reluctance is due to the “heavy regulatory bureaucracy” associated with crypto compliance, highlighting how it took “almost a year of slow development” before DAiM was approved to offer its employer-sponsored services:
“As a consultant, you can’t just start managing and advising Bitcoin because you feel like it. There is a huge amount of work and compliance to be done to develop cohesive operational frameworks, infrastructure and strategic partnerships to be compliant in every state in which you operate”.
In addition, Pokornicky reported “booming” demand for pension investments in Bitcoin, adding: “We have seen the highest demand from individuals between 28 and 45 years of age”.