Access to Information
The mandatory information disclosures in addition to the notification that the plan intends to seek relief under 404(c) are:
- Description of the available investment alternatives including a general description of their investment objectives and their risk/return characteristics
- Identification of any designated investment manager
- Explanation of the various methods for giving investment instructions along with an explanation of any transfer or rights restrictions associated with any investment alternatives
- Disclosure of fees and expenses the plan may charge for any investment transactions including commissions, redemption fees, etc.
- Upon initial investment, a copy of the most recent prospectus for any investment alternative subject to the Securities Act of 1933
- Description of the plan provisions for exercising voting or other rights related to the investment alternatives where the plan passes through the rights to the participant
- Information specific to an investment alternative that consists of employer securities
- Description of all other information available on participant request.
Click here for a sample 404(c) notice.
One of the key attributes of a 404(c) plan is that the participant has the ability to exercise "independent control" over his/her assets, which by definition necessitates the participant having access to the information appropriate to properly exercise independent control. Paragraph 2550.404c prescribes a set of mandatory information disclosures and enumerates other information that must be made available on request.