The U.S. Department of Labor's Employee Benefits Security Administration has published technical corrections to a final regulation aimed at making
it easier for employers to adopt automatic enrollment in 401(k) plans. The department also published guidance to clarify the scope and meaning of the final rule.
In October 2007, the department published a rule
that implemented provisions of the Pension Protection Act of 2006 to provide a safe harbor for plan fiduciaries who invest the assets of participants in "qualified default investment alternatives" in the absence of participant investment direction (such as automatically enrolled workers).
The QDIAs are designed to encourage the investment of employee assets in investment vehicles appropriate for long-term retirement savings.
The technical corrections affect three areas of the final regulation on QDIAs. These include changes clarifying the preamble example on "round-trip restrictions," expanding the scope of who can manage a QDIA to include a committee that is a named fiduciary of the plan, and correcting the "grandfather" relief for stable value funds.
Field Assistance Bulletin 2008-03 provides guidance on a series of frequently asked questions raised by the employee benefit community since publication of the final rule.
The questions address issues relating to the scope of the regulation, the notice requirements, the 90-day limitation on fees and restrictions, management and asset allocation of QDIAs, the capital preservation investment option, and the grandfather relief for stable value funds.