Section 404(c) Participant-Directed Investment Resource Kit

Summary

This resource kit provides Practical Guidance documents regarding compliance by defined contribution plans with Section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA). Where a defined contribution plan (such as a 401(k) or 403(b) plan) allows participants to independently exercise control over the investments in their accounts, the fiduciaries of the plan would be liable for any losses that result from the participants' investment instructions unless the plan complies with Section 404(c) 's (voluntary) safe harbor rules. This safe harbor requires various protective measures including the offer of an investment menu the use of "qualified default investment alternatives" or QDIAs, as a default plan investment for participants who fail to make timely elections under the plan.