404(c) trade confirmations

[k man]

Does ERISA require that participants receive trade confirmations regarding buy and sell transactions in their participant directed accounts? I see 404© does require that participants have an opportunity to give investment instuctions and obtain written confirmation of such instructions. I read that as requiring confirmation of instructions not confirmation of the trade result. does anyone agree or disagree?

If not required by 404© would it be required in another section of ERISA?

[Jon Chambers]

Without necessarily agreeing or disagreeing, I would observe that the large bundled providers have established a de facto standard by using trade confirmations as a mechanism for complying with the 404© requirement for written confirmation of instructions. Although a plain English reading would support a different conclusion, there may be a "generally accepted practice" standard that suggests that trade confirmations are how most providers satisfy this requirement.

With the majority of investment instructions now provided over the web, it would be interesting to know the current definition of "written". Is electronic writing sufficient?

I'm not aware of any section in ERISA, other than 404©, that requires trade confirmations.

[RCK]

We are about to take the position with our plans that requests made through a voice response system will get a written confirmation and requests made through our Internet site will not get a mailed confirmation. The transfers initiated through the Internet will see a confirmation page, and will be encouraged to print that.

We are doing that at the suggestion of our very large unbundled provider.

[k man]

well you have to clarrify, do you mean confirmation of instruction or confirmation of trade result?

[RCK]

Good question. I should clarify that we are dealing only with daily valued Mutual Funds, and not with a brokerage window, or mutual fund window, etc.

So we are confirming receipt of the instructions and execution of the transaction at the same time. Instructions received by 3:00 central are processed that evening at that day's closing prices.

[k man]

which record keeping system do you use if you dont mind me asking?