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What is ERISA Section 404(c)?

ERISA Section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA) defines the responsibilities of plan fiduciaries. Fiduciaries that control plan investments are subject to specific statutory standards of conduct such as acting in a practical manner and being required to diversify investments. If a plan fiduciary elects ERISA Section 404(c) coverage, that fiduciary should adopt an investment policy.

To assist you, Lincoln has provided the following sample investment policies for you to customize according to your plan. To select the appropriate policy, you will need to know if your plan investments are all or partially directed by the plan participants or by an investment committee. This information can be found in the plan document or adoption agreement. Once you create an investment policy, be sure to keep an original copy for your plan records.

DOC Investment Policy Statement for Participant Directed Plans - Use this sample policy if the plan investments are directed entirely by the participants.
DOC Investment Policy Statement for Investment Committee Directed Plans - Use this sample policy if the plan investments are directed entirely by the investment committee.

If your plan has some investments directed by participants and some directed by the investment committee, you must draft a version for each.

Also to assist you, Lincoln has provided the following document which contains frequently asked questions regarding ERISA Section 404(c) and how it works, who is covered, and other regulatory requirements.

PDF ERISA Section 404(c) compliance information Frequently asked questions
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