Erisa Section 404 C

Section 404c of the employee retirement income security act of 1974 is a specific section that addresses an employee s ability to direct all investment related decisions for their own retirement accounts generally speaking section 404 c allows for a pension plan allows for its individual participants or beneficiaries the ability to exercise control over the assets in their accounts.

Erisa section 404 c. Erisa section 404 c compliance checklist erisa section 404 c relieves plan sponsors and other fiduciaries from liability for losses resulting from participants direction of their investments. Section 404 c is a historically misunderstood part of erisa with misconceptions rampant even before the 404 a 5 participant fee disclosure regulations added to the confusion. An erisa section 404 c plan is an individual account plan described in section 3 34 of the act that.

1104 c 5 a as added by this section shall be issued no later than 6 months after the date of the enactment of this act aug. If a retirement plan meets the requirements of erisa section 404 c no plan fiduciary will be liable for any loss that is the direct and necessary result of a participant s exercise of control over the investment of his or her plan account. For example erisa section 404 c plan protects a plan fiduciary from being liable for the losses.

Section 404 c contains what are commonly referred to as a qdia provision and a mapping provision that allow 404 c. And ii provides a participant or beneficiary an opportunity to choose from a. I provides an opportunity for a participant or beneficiary to exercise control over assets in his individual account see paragraph b 2 of this section.

The general rule is that erisa plan fiduciaries are liable for all aspects of selection and monitoring of plan investments and are on the hook for any participant. What is erisa section 404 c. Final regulations under section 404 c 5 a of the employee retirement income security act of 1974 29 u s c.

Under these facts there is a three month period e g january 2 through april 1 during which control could not be exercised by. Erisa section 404 c may offer plan fiduciaries a measure of protection against litigation related to qualified workplace retirement savings plans even in instances where a participant fails to provide investment direction. Overview of erisa 404 a and 404 c when was the last time you reviewed your basic fiduciary responsibilities.

An employee may want to direct their own retirement account so they can control. At your next investment committee meeting consider a discussion around the basic guidelines as set forth by erisa section 404 a and section 404 c.