Selecting and Monitoring of Annuity Selections in Defined Contribution Plans

The DOL has released Field Assistance Bulletin 2015-02 providing guidance on the selection and monitoring an annuity under a defined contribution plan under the requirements of Labor Reg. Section 2550.404a-4.

Document Excerpt

Confusion or lack of clarity regarding the nature and scope of fiduciary responsibilities to act prudently in making, monitoring and reviewing annuity selections under a defined contribution plan could lead plan sponsors or their advisors in some instances to overestimate or otherwise misunderstand the duration or extent of those fiduciary responsibilities. This, in turn, could create or reinforce disincentives for plan sponsors to offer their employees an annuity as a lifetime income distribution. This Field Assistance Bulletin (Bulletin) is intended to provide guidance regarding these issues (including the application of ERISA’s statute of limitations to claims relating to annuity selection) and assist the Employee Benefits Security Administration’s national and regional offices in responding to questions from employers and other interested parties.


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