05/05/2022
From money.com
'Extremely, Extremely Risky': Why Most Employers Probably Won't Allow Bitcoin Into 401(k)s Anytime Soon
https://money.com/fidelity-bitcoin-401k-retirement-employers/
Will companies take Fidelity up on this offer?
As the DOL reminded plan sponsors in the guidance published in March, the Employee Retirement Income Security Act of 1974 (ERISA) means sponsors have what's called a fiduciary duty to act in their employees' best interests when managing 401(k) plans. Fiduciaries who breach this responsibility can be held personally liable.
"Plan sponsors need to be very wary of leveraging Fidelity's new bitcoin offering in retirement plans," says John Palladino, managing director and investor advisor representative at 401(k) & 403(b) Fiduciary Advisors in San Mateo, California, which helps plan sponsors design and manage a retirement plan that makes sense for their company or non-profit.
"This is just an ERISA lawsuit waiting to happen," Palladino says, adding that fiduciaries who understand their responsibilities and duties will likely "run for the hills" when it comes to this offer. "There are just way too many issues when it comes to volatility, the difficulty of making informed decisions, along with custodial, record-keeping and valuation concerns when it comes to bitcoin in a retirement plan.”
Fidelity will soon allow bitcoin in 401(k)s, but regulators are frowning on the move.
