ERISA §404(c)
Diversified Mutual Fund Lineup in your Retirement Plan
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.