Are fiduciaries protected from liability for investment elections?
If proper investment alternatives and default investments are available and explained to participants, fiduciaries are protected from liability for losses caused by participant’s investments. New rules on default investments and fee disclosures will have to be followed to protect your fiduciaries. Do you have safeguards to prevent your plan from holding excess contributions? There are annual contribution, compensation and benefit caps. Plans don’t qualify if they pay benefits over the legal maximum. Excess contributions must be returned if 401(k) plans fail discrimination testing or excise taxes apply. Do your payroll provider and recordkeeper reject or refund excess contributions and properly limit benefits? If your plan holds employer stock, have you complied with SEC requirements? In addition to filing Form S-8 and giving participants prospectuses, plans allowing employees to invest in employer stock may have to file Form 11-K each year with the Securities Exchange Commission. Failu
