The 404a-5 notice discloses certain plan expenses (administration, individual and investment-related) to 401k participants. First required in 2012, its purpose is to help 401k participants make informed plan choices.
In this way, what does 404 C compliance mean?
ERISA section 404(c) relieves plan sponsors and other fiduciaries from liability for losses resulting. from participants’ direction of their investments. This protection applies only to participant- directed investments, and not to investments required under the plan or directed by the plan. sponsor.
Thereof, what are 408 b )( 2 disclosures?
The 408(b)(2) disclosure regulation requires a covered service provider that reasonably expects to be a fiduciary to an ERISA plan to disclose to the responsible plan fiduciary its status as a fiduciary, along with a description of its services and fees.
What is a 404a5 fee disclosure?
The disclosure should describe the general plan administrative fees and expenses and explain how they will be allocated on a plan-wide basis (i.e. ratably or per capita). Fees and expenses may include legal, accounting, recordkeeping or investment advisory fees.
What is a 401k fee disclosure?
The Department of Labor issued participant fee disclosure rules for participant-directed plans which first became effective in 2012. These fee disclosures are designed to help participants understand how much they are paying for administration of their 401(k) plan.
What is a 404 plan?
Section 404(c) is a specific part of this law that permits employees to direct the investment of their own retirement accounts. … The section follows a prudent standard of care requirement and offers “safe harbor” for employers or other plan sponsors who allow their employees to direct the investments of their accounts.
What does erisa protect?
ERISA protects the interests of employee benefit plan participants and their beneficiaries. It requires plan sponsors to provide plan information to participants. It establishes standards of conduct for plan managers and other fiduciaries.
What is a functional fiduciary?
By definition, a functional fiduciary is any person or entity that exercises authority and management of a retirement or benefit plan, or that has a responsibility to administer the plan.
What is a Qdia 401k?
A 401(k) QDIA (Qualified Default Investment Alternative) is the investment used when an employee contributes to the plan without having specified how the money should be invested. As a “safe harbor,” a QDIA relieves the employer from liability should the QDIA suffer investment losses.
What is a fee disclosure notice?
Annual fee disclosure notice – Describes information about plan fees and investments. This notice consists of two parts: Participant fee disclosure – Reports certain plan administration information, including the plan and individual-level fees that might be deducted from participant accounts.
What did the Employee retirement Income Security Act erisa of 1974 do?
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.