ERISA Section 404(c) Policy Statement

ERISA Section 404(c) Policy Statement is a legal template specifically designed to outline the policies and procedures adopted by a retirement plan sponsor or fiduciary in accordance with the Employee Retirement Income Security Act (ERISA) Section 404(c) requirements.

ERISA, which governs most private-sector retirement plans in the United States, aims to protect the interests of employees participating in employment-based retirement plans. Section 404(c) establishes guidelines and responsibilities for plan administrators and fiduciaries, allowing participants to exercise control over their retirement investments.

This legal template primarily focuses on creating a detailed policy statement that addresses requirements and safeguards mandated by ERISA Section 404(c). It outlines the plan sponsor's commitment to providing participants with investment options and control, while limiting the plan sponsor's potential liability for participants' investment decisions.

The template typically includes important provisions such as:

1. Purpose and scope: Clearly defines the objective and applicability of the policy statement within the retirement plan.

2. Investment options: Identifies the available investment alternatives within the plan and describes the criteria for selecting and managing these options, including diversification, liquidity, and risk considerations.

3. Participant education and communication: Details the plan sponsor's commitment to providing clear and easily understandable information to participants regarding investment risks, plan features, and the importance of diversification.

4. Self-direction and control: Outlines the steps participants must take to exercise control over their investment choices and any restrictions or limitations placed by the plan sponsor.

5. Monitoring and review procedures: Establishes a framework for regularly reviewing and evaluating the investment options, ensuring they remain suitable and aligned with participants' interests.

6. Plan fiduciaries' responsibilities: Clarifies the fiduciaries' duty of prudence and loyalty when carrying out their roles, including the duty to monitor investment options and the obligation to disclose relevant information to participants.

By utilizing the ERISA Section 404(c) Policy Statement template, plan sponsors and fiduciaries can demonstrate their compliance with ERISA regulations, reinforce transparency in retirement plan offerings, and limit potential liability associated with participants' investment decisions.