The core fiduciary responsibility under Section 404(a) is to maintain and follow a written plan document that complies with ERISA and when making decisions that affect the plan, ensure that these decisions are made prudently and “solely” on behalf of and for the exclusive benefit of the plan participants and their ...
What is erisa 404 A?
ERISA Section 404(a)(1)(A) requires a fiduciary to discharge his/her duties solely in the interest of participants and their beneficiaries for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the plan.
What is a 404 a )( 5?
The Department of Labor’s (DOL’s) 404(a)(5) fee transparency efforts are designed to provide participants with at least an annual—and in some cases a quarterly—breakdown of the fees that they are directly incurring for plan administration, investment management, and advisor services, effective for plan years beginning ...
What is erisa 404c 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 is a 403b plan?
A 403(b) plan, also known as a tax-sheltered annuity plan, is a retirement plan for certain employees of public schools , employees of certain Code Section 501(c)(3) tax-exempt organizations and certain ministers. A 403(b) plan allows employees to contribute some of their salary to the plan.
What is 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?
Department of Labor (DoL) regulations require that a retirement plan’s participants are provided with timely and comprehensive information about their investment fees. ... Important note: A fee disclosure has to show all the fees that participants face – from custodial and recordkeeping fees to investment expenses .
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 ERISA status?
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.
How can fiduciary responsibility be avoided under ERISA?
Certain transactions are prohibited under ERISA to prevent dealings with parties who may be in a position to exercise improper influence over the plan. In addition, fiduciaries are prohibited from engaging in self-dealing and must avoid conflicts of interest that could harm the plan.
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 the role of a directed trustee?
Second is a directed trustee that is subject to the direction of a named fiduciary who is not a trustee (or an investment manager). A directed trustee has fiduciary responsibility and liability for taking direction for the selection, monitoring, and replacement of plan assets .
What is a 401a trust?
Section 401(a)(1) provides that a trust or trusts created or organized in the United States and forming a part of a stock bonus , pension, or profit-sharing plan of an employer for the exclusive benefit of its employees or their beneficiaries is qualified under § 401(a) if contributions are made to the trust or trusts ...
What are the disadvantages of a 403 B?
One of the main disadvantages of 403(b) plans is that the government penalizes you if you take your money out too soon . According to the IRS, 403(b) accounts are subject to a 10 percent early withdrawal tax penalty if you withdraw funds before the age of 59 1/2.
What happens to my 403b if I quit?
Your vested balance is the amount of your 403(b) that you get to keep if you quit. Your unvested balance will go back to your employer when you quit whether you leave your 403(b) there, transfer it to your new employer, or withdraw it.
Is 403b better than 401k?
While 401(k) and 403(b) plans have the same general contribution limits, 403(b) accounts have an edge: Employees who have worked for a qualified organization for 15 years or more may be eligible to make additional contributions.
