Participant Directed
Defined contribution plans, commonly referred to as participant-directed or self-directed plans, are plans that give participants investment options to choose from so they can exercise independent control over their individual accounts. According to the U.S. Department of Labor, this can be allowed if, and only if, participants truly exercise independent control in making their investment choices. Participants must have complete knowledge of the plan and the Plan Trustee must offer at least three varied investment options with different risk and return factors.
If a participant-directed plan is the way you choose to go, let Alison, LLC guide you through the process. Though participants cannot sue the Trustee for losses incurred while directing their own plans, there still is a lot of responsibility on the Trustees part to present good investment options fully spelled out. Educating your plan participants, though not mandatory, can help alleviate any potential future problems, giving your employees plenty of information helps them make well informed investing decisions.
Alison, LLC can make sure you are covered. Here are a few of the items we can provide as your investment managers:
- Choose wise investments
- Monitor investment performance
- Be the “go to” people for any questions
- Provide a policy statement explaining decisions made in selecting investments including investment description, risk level and return expectations
- Make available a statement of any fees that may be charged while buying or selling investments
- Provide instructions on any restrictions or directions on when and how to make or change investments
- Distribute information on shareholder voting rights and privacy when voting
You can see even with a participant-directed plan, there is a myriad of requirements that need to be met.
As co-fiduciaries, we believe in going beyond the minimum requirements in order to protect you from any potential liability associated with running a group plan. Let Alison, LLC help you comply, direct and succeed.