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Treasury Department in July 2014 for use as a distribution option in employer-sponsored individual account plans, QLACs can be purchased with the lesser of 25% of a participant's account balance, or $125,000.
Rather, the DOL has stated that employer fiduciaries wishing to avoid fiduciary liability should offer an investment menu in order to enable participants to "construct a portfolio with risk and return characteristics appropriate to their circumstances" [Final Regulation Regarding Participant Directed Individual Account Plans, 57 Fed.
Next January, the DOL expects to issue notices of proposed rulemaking about the safe harbor for the selection of annuity providers for individual account plans, as well as the inclusion of lifetime income estimates on participants' defined contribution (DC) account statements.
However, exchange-traded funds (ETFs) are beginning to attract greater attention for participant-directed individual account plans, especially since the introduction of a new fee disclosure mandate and greater interest in ETF-based 401(k)s from big-name brokerage firms.
What guidance has the DOL provided regarding abandoned individual account plans?
section 2550.404a-5 which addresses fiduciary requirements for disclosure in participant-directed individual account plans. The comments were prepared by the AICPA's Employee Benefits Taxation Technical Resource Panel with input from the Personal Financial Planning Executive Committee.
Instead, the regulations should be designed to encourage the provision of disability protection in individual account plans through all of the methods in use today."
Effective in 2007, the PPA provides for a prohibited transaction exemption for certain investment advice to participants in individual account plans. The advice must be provided by a "fiduciary adviser," which is defined as a registered investment adviser (under the Investment Advisors Act of 1940) or a bank, insurance company or broker-dealer (under the Securities Act of 1934).
Effective 2007, the PPA provides for a prohibited transaction exemption for certain investment advice to participants in individual account plans. The advice must be provided by a "fiduciary adviser," which is defined as a registered investment adviser (under the Investment Advisors Act of 1940) or a bank, insurance company or broker-dealer (under the Securities Act of 1934).
(32) This requirement does not apply to Employee Stock Ownership Plans; individual account plans, such as 401(k), profit-sharing, stock bonus, thrift, or savings plans; and certain grandfathered plans.

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