404c ERISA Compliance
To comply with 404(c), DOL regulations
generally require that plan participants
be provided with:
- The opportunity to choose from a broad selection of
investment choices, including a core of at least three
different investment alternatives. Each investment
alternative must be diversified and have materially
different risk and return characteristics.
- The opportunity to transfer account balances between
investment alternatives
and/or change investment direction at least once within any
three-month period (or more often if reasonably needed due
to the volatility of an investment
option).
- Information about the 401k retirement plan ’s
investment choices to help them make informed investment
decisions. Some information must be delivered to all
participants while other information must be made available
upon request.
As a result, effective employee education and communication
are the most critical elements to successful compliance
with ERISA 404c.
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