Appendix A...
404c Compliance for Your Company Plan
Your Plan Administration Software Helps You Meet ERISA's 404c Requirements
Online Investment Advice Sources
The Employee Retirement Income Security Act (ERISA), along with the Internal Revenue Code, sets the legal framework within which all 401k plans must operate. ERISA aims to prevent asset mishandling by administrators, trustees, and others. All 401k plans must meet the guidelines set forth in ERISA Section 404(c) regarding educating employees about 401k plans and disclosing plan and investment-related information to them.
Your plan administration software includes general and plan-specific disclosure and investment educational materials for your employees. In addition, personal investment advice services are available online. Participants can sign up for these services to help them make educated investment decisions.
Your Plan Administration Software Helps You Meet ERISA's 404c Requirements
Your plan administration software helps you meet 404(c) requirements in a number of different ways:
• Your plan offers an array of mutual fund investment options and, if your company has so selected, individual participant-directed brokerage accounts.
• Your plan's participants can change their investment choices and/or contribution levels as often as you allow.
• Participants’ accounts receive daily asset valuation and monthly statements.
• Participants have 24-hour-a-day, seven-day-a-week access to their personal account information and easy access to prospectuses for all mutual funds offered within the plan.
• your plan administration software comes with general 401k and investment education materials in both printed and video format for your employees. This includes written materials to be passed out at your enrollment meetings (part of the Investment Decisions Pac) that help employees decide what kind of investors they are and what kinds of funds are best for them. In addition, we supply you with material that introduces your employees to the online retirement guidance and educational services. Participants can individually choose to sign up for services from such industry leaders as mPower and FinancialEngines. Individuals pay for the services themselves, yet your company benefits in meeting the 404(c) compliance by providing the introduction.
• your plan administration software comes with plan-specific disclosure materials for your employees.
• your plan administration software automatically prepares and updates account statements for each participant every month (and prepares mailing labels, making distribution of the statements a breeze).
• Using your plan administration software you can permanently log all employees’ requests for information. And the Quick Guide and this Supplement tell you what information to distribute , when, and to whom.
Online Investment Advice Sources
Many credible sources are available that deliver fast, timely, professional online 401k investment advice to 401k participants. Most allow for either the employer or the individual employees to pay for the service; however, when the participants pay for the services themselves, they have the freedom to choose the service best suited to their individual needs.
Details about specific retirement and investment advice services can be found on our website.
