Bitcoin-based retirement plans?

Asset manager Digital Asset Investment Management (DAiM) has launched the first employer-sponsored Bitcoin-backed retirement plans in the United States (DAiM headquarters), which will be able to be offered to workers starting in 2021.

DAiM? The asset manager focuses its activity on the management of high growth (bitcoin) and broad return digital assets. According to their Web page "the disruptive potential of (this) asset class and the investment opportunities this creates, is a phenomenon once in a generation”It is precisely on the basis of that phrase that the launch of these retirement plans based on digital assets makes total sense.

The "401 (k)" plan involves the creation of several variable risk investment portfolios with an allocation of up to 10% to Bitcoin, he noted. the diariobitco. According to the announcement, DAiM will be the advisor and fiduciary of the companies in the creation of these investment plans, with which, it will be responsible for the selection, monitoring and comparative evaluation of the investment offer. However, this will be only one of the retirement plans that employers will give their workers to choose, so it will not be an obligation to accept them.

The Gemini Trust will keep the bitcoins in cold storage (that is, totally separate from any internet access, thereby reducing the risks of hacking). In this way, DAiM will be able to transfer bitcoins to former employees of the companies participating in these investment plans.

According to DAiM, its retirement plans comply with the Employee Retirement Income Security Act of 1074 (US federal law that establishes the minimum standards for private sector pension plans).

Why would workers choose this option if the volatility of bitcoin and other digital assets is widely known? According to DAiM, this would have to do with the “inability of conventional plans to keep up with inflation”, which evidently generates losses for savers. And they add: "It has never been possible to invest in Bitcoin while working in a company without receiving a penalty or resigning, until now”. Any worker who sees the value of bitcoin steadily approaching $ 20k would want their retirement pension to be invested in these funds. In fact, the workers most inclined to accept this type of retirement plan are people between the ages of 28 and 45.

Only time will tell us whether these retirement plans turn out to be the best ever or just a great act of optimism based on the short lifespan of digital assets.

 

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Marilú Lazo
Lawyer from the Pontificia Universidad Católica del Perú (PUCP). Director of The Crypto Legal Blog, she has experience in corporate advice, consumer protection, as well as in matters of personal data protection and new technologies.

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