It’s a big move given that Fidelity is the largest 401 plan provider in the United States, acting as custodian for 23,000 plans, which have 20.4 million participants.
“But we have a number of clients that have committed and a number of others in the evaluation process,” said Dave Gray, Fidelity’s head of workplace platforms and products.
But limits will be set on how much they can contribute – Fidelity won’t allow any employer to set that limit higher than 20%, Gray said.
There will also be a limit set on how frequently one can make “round-trip trades” into or out of the account.
And the annual fee for the administration will be between 75 to 90 basis points of the assets in the account – so $75 to $90 for every $10,000.
Fidelity asserts that the DOL has overstepped by singling out an investment type and implying that it is imprudent rather than leave that assessment to employers with fiduciary duty for their plans.
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