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Savings plan investments—how far does the employer's responsibility go?
Author(s) -
Holleman Linda P.,
Canfield John C.
Publication year - 1991
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970030102
Subject(s) - fiduciary , employee retirement income security act , plan (archaeology) , business , investment (military) , compliance (psychology) , finance , accounting , section (typography) , public relations , pension , law , political science , duty , advertising , politics , psychology , social psychology , archaeology , history
Many 401(k) plan sponsors as well as sponsors of other types of defined contribution plans have chosen to provide several alternatives for employees to direct the investment of their accounts in these plans. By providing alternatives to employees, plan sponsors feel that they have transferred responsibility for the investment returns from themselves to the individual employees. The Department of Labor's (DOL) revised proposed regulations under Section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA) raise the question of where the employer's responsibility ends in this situation and where the employees' begins. This article summarizes the fiduciary responsibilities involved and the relief from those responsibilities that is provided by compliance with the DOL's proposed regulations.