Protective Relief Under Section 404(C)!
This section of ERISA lets Plan sponsors available themselves of protective relief for participant directed (or their beneficiaries’ directed) investment decisions. Here are important aspects related to this section of ERISA:
- Sponsors need to notify the participants that they intend to comply with Section 404 (c) and that participants can direct their investment options.
- Sponsors need to provide at least 3 diversified, core investment options.
- Sponsors need to designate a QDIA (Qualified Default Investment Alternative)
- Participants need to have access and control to make timely investment decisions with respect to their portfolio investments.
In addition to the above, Plan sponsors might be well advised to have a participant education program, which covers the investments offered as part of the Plan.
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The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your plan’s individual facts and circumstances.
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