Plan Was Supposed To Allow Participant Investment Direction -- But Did

[Guest EMC]

What would the correction be where the plan document calls for partcipant direction of investments, but the plan sponsor did not permit this to happen in operation? (not an intentional action, but more of an omission)

The plan fiduciaries can no longer rely on the protections of ERISA 404©, but what about making a correction to the operational error?

Thanks.

[rcline46]

The allowance of participant direction in a plan does not mean participant direction MUST be allowed. Participant direction procedures must be created, investment choices set up, ect.

I see no failure to follow document, no correction necessary (in any document I have ever seen).

[jaemmons]

EMC,

Did the participants make investment selections on enrollment forms or by any other means provided by the trustee(s), whereby the trustee had to acknowledge them in writing or electronic confirmation?

[Guest Therese]

How were the plan & spd worded? Did the spd tell participants they had a right to direct investments and that they should request the forms needed to do so? I'd usually put that in and specify what the default investment choice is if the participants make no election. The plans & spds I've worked on have been quite clear that this was each participant's decision, not the plan sponsor's or trustee's. That way if no participant inquires, there's no problem. (Of course, I don't think I've seen a case where no participant asked.)