Leaderboard

From a legal/plan document standpoint you can't allow just Roth deferrals without allowing traditional deferrals. But if it turns out that all participants elect only Roth deferrals that's perfectly fine.

"and the notice says "your fund has been mapped to a fund with similar objectives and characteristics" You know, I've read this entire thread, and I see NOWHERE where the contents of the notice are spelled out. The OP says the HR people said (which is already a two step leap in the "telephone game") that funds were mapped into like funds. Not what I would bank on in any way shape of form. Let me see the notice. Let me see emails - or other documentation of conversations. Far too often those answering the questions aren't the ones who are making the decisions or are the real fiduciaries of the plan. 1) ONLY through the actual content of the notice can any determinations be made as to what it contains, and whether or not it was appropriate. I've seen (and have written) such notices that spell out that an attempt was made to move funds into like-investments, but where there is no like investment offered, those funds will be mapped to the XYZ fund, or a balanced fund, or a default fund, or a conservative fund, or ... or ... or .... It really is IRRELEVANT. If the notice said this precious metal fund WAS GOING AWAY (a VERY prudent decision, in my humble opinion) and the money invested in it would be invested in the "XYZ" fund, then so be it. Notice given. Prudence is the standard. The burden falls on the plaintiff, and HE THREW THE NOTICE AWAY. 2) As has been pointed out - the relative performances of the two funds is also IRRELEVANT. The decision is a "fiduciary" one, and the standard is "prudence.' Precious metal funds are very volatile (both up, and back down). Timing here may have sucked - but that isn't a criteria of "prudence." The advisors I work with NEVER would recommend inclusion of a precious metal fund, and where one exists, the contracts CLEARLY lay out (I wrote the language) that the advisor assumes NO RESPONSIBILITY, fiduciary or otherwise) for that fund. Too much risk. No reward for the fiduciary. 3) It is also IRRELEVANT whether he would have acted differently had he read the notice. The notice just provides information. Had he read the notice and done NOTHING, he would have assumed the risk of what the new fund's performance was (assuming the notice was appropriate and complied with 404© standards - and if it didn't, that's a different story from the one we've gotten so far). It would be no different if he had gotten a notice that announce a totally new fund in the line up, but did nothing to invest in it. If it became the plan's best performing fund - could he then sue the fiduciaries because he didn't invest in it,and his investments didn't perform as well? NOT! The notice is there to make the decision the participant's. Read it. Don't read it. As long as you got it (and it was correct), the risk is the participant's - not the plan fiduciaries. 4) I agree with everything that's been said about how the courts would approach this matter. The amount of the loss is IRRELEVANT. The only questions are 1) was the decision "prudent" (considering there is NOTHING that requires the plan sponsor to continue to offer a participant's favorite fund - or any fund for that matter (I have clients that still totally direct ALL plan assets (and they are doing quite well, I might add)); and 2) did the participant receive sufficient notice (and he's admitted to receipt - the only question would be one of sufficiency) such that the burden shifts. To the OP: 1) READ what you get (and as other's have pointed out, don't assume the "unknown" is "junk"); and 2) get engaged in what's happening AT YOUR COMPANY (you said you were a "partner" - at least in the old company that sold/merged with the new company. As a partner - you may actually have some fiduciary liability yourself....