Getting Participants to Sign Waiver Regarding Self-Direction of 401(k)

[Guest McElroy]

Effective 1/1/01, a client will permit participants to transfer up to 50% of their account balance into a brokerage account. They will then be able to buy and sell securities that are traded on national exchanges (no options however). Does anyone have a form of waiver that has been used advising participants of the risks associated with such investing and indicating that participants will not look to plan sponsor for redress if the investments perform poorly? Thanks for your help. Ed

[Jon Chambers]

I'd recommend against using such a form. Although I'm not aware of any case law or cites, I don't believe that you can legally waive rights under ERISA. There are other techniques for managing fiduciary liability for brokerage accounts. Suggest you review that specific thread.

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Jon C. Chambers

Principal

Schultz Collins Lawson Chambers, Inc.

(415) 291-3004

[Kirk Maldonado]

I agree with Jon Chambers. I don't think that the DOL would look favorably upon such waivers, to say the very least.