Cryptocurrency payroll service Bitwage has announced the launch of a Bitcoin 401 (k) plan, allowing companies to give their employees a BTC-based retirement plan.
In a press statement, Bitwage, which claims to have tested the product on its own employees for 10 months, said workers now have the ability to invest their pre-tax and post-tax dollars in BTC, through their employer.
A 401(k) is a retirement plan that allows employees of a company to save and invest for retirement on a tax deferred basis. Under the plan, companies can match employee contributions in part, or in whole.
The pre-tax plan, also known as traditional 401k, allows investment deferrals on income tax until withdrawal while the post-tax plan or Roth 401k allows investments that are tax-free on qualifying withdrawals.
Based out of San Francisco, Bitwage is collaborating with crypto exchange Gemini, pension service provider Leading Retirement Solutions, and custodian service owner Kingdom Trust on the plan.
“All funds will be converted on Gemini automatically for each pay period. Employees will be able to choose to buy and sell between USD and bitcoin as they want,” said the company.
Bitwage stated that it is also looking to integrate Gemini’s trade facility directly into the Bitcoin 401(k) plan so that “institutional as well as retail investors have access to the same Gemini trading tools inside of tax-incentivized retirement accounts.”
The company claims that it’s 401k plan helps small businesses meet requirements for the U.S’ Paycheck Protection Program (PPP), a government loan scheme for incentivizing worker retention during the Covid-19 crisis.
As a means of keeping more workers employed, the PPP, managed by federal authority Small Business Administration (SBA), offers 100% loan forgiveness to businesses that commit 75% of the funds to the payroll.
Bitwage’s BTC plan gives employers the option to provide retirement benefits that qualify as part of the 75% expenses, it said.
“It turns out that retirement benefits are included in the expenses that can be counted towards the 75% payroll expenses and they are not included in the $100,000 yearly salary cap per employee,” Bitwage explained.
“This gives companies an opportunity to provide matching or profit-sharing contributions to employee 401k accounts in order to help close the gap to receive full loan forgiveness,” the company adds, stressing that its 401k plan allows employers to get more out of PPP loans, while providing employees “innovative investment options.”
Bitwage, which operates in the U.S, Europe, Latin America, and Asia, had over 30,000 users and has processed $100 million in transactions.
What do you think about the Bitwage Bitcoin 401k plan? Let us know in the comments section below.
The post Bitwage and Gemini Partner to Launch Bitcoin-Based Retirement Plan for Employees appeared first on Bitcoin News.