• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Employee Benefits Law Group

Employee Benefits Law Group

Guidance. More than just Legal Advice.

  • What We Do
    • ESOPs
    • Mergers & Acquisitions
    • Governmental Employee Benefits
    • Retirement Plans
    • Equity & Executive Compensation
    • Health & Welfare Plans
  • Our Team
  • Resources
  • Contact
Employee Benefits Law Group
Home > Resources > Retirement Plans > ERISA Section 404(c) Compliance Alert

ERISA Section 404(c) Compliance Alert

April 26, 2010 by Ken Ruthenberg

Do you have a defined contribution plan that allows participant-directed investments? If so, read on.

Participants generally will be responsible for the investment results of their accounts if the applicable regulations under ERISA section 404(c) are followed. But what if a participant fails to direct her or his own investments? If the 404(c) rules regarding qualified default investment alternatives (QDIA) are met, participants will be treated as exercising control over their accounts even if they fail to direct their own investments and their accounts are invested in a QDIA. To comply with the 404(c) rules and insulate plan fiduciaries from liability with regard to QDIAs, you must give an annual notice to the plan participants.

Notice must be given at least 30 days before the start of each plan year and must inform the participants that their accounts will be invested in a default investment if they do not choose an investment. Failure to provide such notice could subject plan fiduciaries to liability for any loss incurred by investing a participant’s account in the default investment. Department Of Labor regulations require specific disclosures to be addressed in the notice.

Please contact us if you have questions or need help drafting a notice.

Filed Under: Retirement Plans Tagged With: Blog

About Ken Ruthenberg

Ken's executive compensation clients appreciate learning the latitude they may have with plans that meet their organizational goals by conditioning rewards to key employees. He helps them implement their creativity while staying within the rules. They also count on his unsurpassed knowledge of the law governing qualified and non-qualified plans, and health and welfare benefits for efficient and effective solutions.
Learn More About Ken

EDITOR’S NOTE: We did the best we could to make sure the information and advice in this article were current as of the date of posting to the web site. Because the laws and the government’s rules are changing all the time, you should check with us if you are unsure whether this material is still current. Of course, none of our articles are meant to serve as specific legal advice to you. If you would like that, please call us at (916) 357-5660.

Recent Retirement Plans Posts

Oops! We’re in a Controlled Group of Companies. What Happens to Our 401(k) Plan Now?!

Retirement Plans – IRS Gives New Options for Voluntary Correction But Also Takes Away

Have You Been Keeping Up with Benefits Law Changes?

Don’t Miss Out! Subscribe

We cover all things employee benefits law.

Privacy Policy

We never share your info.

Let’s Start a Conversation

Have questions about your current benefit plan? Want to know what your benefit plan options are? Whatever your need, we’re here to help. Fill out a hassle-free request form, and one of our team members will follow up to get you on the path to success.

Get In Touch

Footer

Our experienced team guides you in all aspects of ESOPs, M&A due diligence, retirement plans, equity / compensation, and health and welfare benefits.
Sacramento Office
916-357-5660
11231 Gold Express Dr.
Suite 108
Gold River, CA 95670
San Jose Office
408-467-3860
2033 Gateway Place
Suite 500
San Jose, CA 95110
Phoenix Office
2550 W. Union Hills Dr.
Phoenix, AZ 85027
Los Angeles Office
310-571-8896
10880 Wilshire Blvd
Suite 1101
Los Angeles, CA
90024
San Diego Office
916-357-5660
550 West B Street
San Diego, CA 92101
  • LinkedIn
  • Email

Copyright © 2023 Employee Benefits Law Group · Privacy Policy · Site Design by Delos Incorporated