404(c) compliant?

[Guest TrustMe401k]

Ok, without going into the arguments about whether or not its even possible to meet all the requirements of 404© and whther or not its worth it to try, etc. lets look at this scenario.

Bank A sponsors 401k and MP plans. They will continue to sponsor both plans for reasons that don't matter here) 401(K) plan is in a daily valued environment. MP is balance forwward, valued annually and invested solely in bank CD. Current TPA says both plans are 404© compliant. Anyone want to chime in on this?

Are they lookign at the aggregate plans to try to show 404c complaince? Doesn't sound right to me but they insist the Bank does not have any issue to worry about. Any thought are appreciated.

[E as in ERISA]

ERISA Section 404© is only available with regard to participant directed assets. If all the assets are in a CD, they probably are directed by the trustee. And it doesn't sound like they meet ERISA 404 requirements either (not invested to create adequate returns for retirement benefits, not diversified with respect to either risk and return or with respect to source).