How many investment options must be offered under a 401(k) Plan?
Employers may offer as many investments as they deem appropriate. However there are guidelines under Section 404 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). These guidelines provide recommendations as to the number and scope of the investment offerings that an employer may choose to make available to plan participants, and require a minimum of three investments with differing risk/return characteristics. Note: Section 404 is a complicated provision of ERISA and contains a variety of provisions that must be met to qualify for its Safe Harbor provisions. Consult your legal counsel for details.
