Section 404 C Of Erisa

This protection applies only to participant directed investments and not to investments required under the plan or directed by the plan sponsor such as employer stock.

Section 404 c of erisa. Erisa 404 c relieves plan sponsors and other fiduciaries from liability for losses resulting from participants direction of their investments. 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. 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.

Added protection makes it worth the effort section 404 c of erisa dates all the way back to 1974 but plan sponsors and fiduciary service providers are still trying to figure out what it means for their defined contribution dc plans. Final regulations under section 404 c 5 a of the employee retirement income security act of 1974 29 u s c. Section 404 c is a historically misunderstood part of erisa with misconceptions rampant through the plan sponsor community even before the 404 a 5 participant fee disclosure regulations added to the confusion.

According to an informative white paper published by wells fargo section 404 c compliance. Section 404 c is a specific part of this law that permits employees to direct the investment of their own retirement accounts. 2 limitation on liability of plan fiduciaries.

This protection applies only to participant directed investments and not to investments required under the plan or directed by the plan sponsor. The employee retirement income security act of 1974 is a federal law that establishes the standards for private pension plans such as 401 k s and 403 b s. 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 participant or beneficiary of an erisa section 404 c plan exercises independent control over assets in his individual account in the manner described in paragraph c then such participant or beneficiary is not a fiduciary of the plan by reason of such exercise of control. This article attempts to address the fundamental issues regarding erisa section 404 c that every advisor should master. What is erisa section 404 c.