(b)lines Ask the Expert – ERISA 404(c) Protection

September 2, 2008 (PLANSPONSOR (b)lines) - A plan provider asks: "Assuming the requirements under 404(c) are met, is 404(c) protection available to 403(b) plan sponsors? If so, does it extend to annuities or only to mutual fund accounts?"

Section 404(c) of ERISA can apply to any investment in an individual account plan subject to ERISA, whether 403(b) or 401(k), if the participant exercises control over the assets in his or her account. 

Whether it applies for particular investments depends upon whether the participant’s control over each investment meets the requirements of section 404(c), the Labor regulations, and other guidance under that provision.  It is possible that it can apply to any particular investment available for the participant, but whether it actually does depends on the specific facts in the situation. 

David Powell, Groom Law Group, Chartered

NOTE: This feature is to provide general information only, does not constitute legal advice as part of an attorney-client relationship, and cannot be used or substituted for legal or tax advice.

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