Plan sponsors may have to invest employees' 401(k) contributions themselves when employees elect to participate in the plan and designate an amount to be withheld, but fail to make investment choices; when employees roll over assets from another employer's plan and likewise fail to give investment direction; when employees are automatically enrolled into the plan; and when the plan changes investment options, but employees fail to make new designations. Normally, fiduciaries are liable if these default investments don't pan out. Final regulations relieve fiduciaries from liability for default investments when certain notice and investment standards are met. Bad news: Two common default investments — stable-value funds and money-market funds — generally don't garner protection from fiduciary liability under the final regs.
Qualified Default Investment Alternatives
Fiduciaries receive relief when plans ...(register to read more)