Canadian here, so not intimately familiar with the mechanics of a 401k, but I'll give a perspective assuming its similar to an RRSP with an early-withdrawal penalty and attempt to answer what I think you're asking.
The main benefits to contributing are:
1) employer match, which is free money. (It won't take much to max out the matching, so you don't have to put up much to get the free money.)
2) tax-free compounding. Your investment returns aren't taxed while the investments are in the account, so the money grows faster than if you had taxes continuously nibbling away at your returns. Over time this compounds to grow you a bigger nest egg than if you had the same investments in a regular account.
3) deferring income from higher-tax-bracket years to lower-tax-bracket years. Say today your marginal tax rate is 40%. On the last $1000 you earn in that particular year, you only get to keep $600. But what if you could wait to pay the taxes on that $1000, say in a year when your marginal rate is only 20%? That $1000 of income you earned is now $800 in your pocket instead of only $600. Less for the tax man, more for you. Plus the $1000 was growing tax-free in your 401k, so you are getting that double benefit.
For the undisciplined, retirement accounts theoretically make the money off-limits, so it's a form of forced savings, as well. Of course, some people still cash them out, anyway, for a variety of reasons (some reasons, like to fund a spendy lifestyle, unquestionably bad.)
So think of your 401k as a tax-planning tool. The "right" amount to contribute depends on your income and tax bracket, debt situation, other tax-advantaged options you have, and how much of your investments you'll need to access before 65 versus how much you can put away right now, knowing you can't touch it (and hopefully won't need it) for years to come.
If your employer's plan has lousy investment choices (and assuming you can open a 401k account independent of your employer; it's like that up here), I'd stick the minimum needed to get the entire employer match into the Fidelity account, then invest the rest in your own 401k account. If you can transfer funds out of the work Fidelity account into the one you set up, I'd do that periodically to get your money into investments of your choosing. (This answer applies after you've decided what level of 401k contributions vs. debt repayment is optimal for your situation.)
Hopefully this helps answer what you were asking!
