ERISA §404(a)-§404(c)

Selecting and Monitoring Retirement Plan Investments 

ERISA §404(a)

outlines the responsibilities of the plan fiduciary duties regarding selecting, monitoring and updating the employer sponsored retirement plan mutual fund investment options.

  • Maintain and update the Investment Policy Statement (IPS) – Outlines how the investments selected and monitored

  • Monitor the mutual fund investments in the plan and make updates when necessary

  • Put together a mutual fund lineup which is diversified and covers all areas of markets, providing participants with a broad range of investments.

  • Periodic review of investment recommendations and policies, which are part of each quarterly fiduciary investment review, provided by your plan’s consultant

  • Keep records of the Investment Committee meetings and annual plan review meetings with the company and participants.

  • Monitoring the expenses of the plan, making sure fees are reasonable.

Glover Park Wealth Management adheres to the ERISA §404(a) rules with your retirement plan.  When working with our firm, we work with the plan administrator to offer the lowest cost mutual funds with exceptional long term investment returns in your selected recordkeeping platform.

Diversified Mutual Fund Lineup in your Retirement Plan 

ERISA §404(c)

ERISA §404(c) alleviates the plan sponsors and the retirement plan fiduciaries from liability for losses that result from the participant fund selections.

This protection applies only self-directed investments by participants, however it does not protect investments in the plan that are directed by the plan sponsor, such as employer stock.

To take advantage of ERISA §404(c), the plan must satisfy three categories of requirements:

  • Broad diversified menu of low-cost mutual funds in the retirement plan lineup
  • Ensuring the retirement plan design and administrative duties are optimized.
  • Disclosing all documents to participants

Below are the compliance areas in which we provide advice to retirement plan sponsors to protect plan fiduciaries from participant self-directed losses as outline in ERISA §404(c)

  • Broad diversified menu of low-cost mutual funds in the retirement plan lineup with multiple risk categories offered.

  • Providing participants, a list of mutual funds in the retirement plan and their expense ratios.

  • Employee sponsored retirement plans are non-discretionary, meaning the participant has ultimate control over their investment selections and ability to move money in and out of the plan in accordance with the plan adoption agreement.

  • Providing participants with retirement plan investment education about the plan, investments, and their options.

  • Participants have ultimate control over their investments and must make those elections at the retirement plan custodian of the plan.

  • Making sure the retirement plans default fund follows the qualified default account (QDIA) rule

  • Distributing the §404(c) Notice and Policy Statement on an ongoing basis so participant disclosure requirements are met.

When selecting Glover Park Wealth Management as your 3(21) Co- Fiduciary and retirement plan consultant, we make sure that your plan adheres to the ERISA §404(c) rules and regulations.