The document also offers guidance to clarify the scope and meaning of the final rule. Field Assistance Bulletin (FAB) 2008-03provides guidance in the form of a Q&A, answering questions raised by the employee benefit community since publication of the final rule in October 2007 (See Final QDIA Rules Published, DoL’s Campbell Gives More Details of Final QDIA Regs). 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.
In the FAB, the DoL said the fiduciary relief given to plan sponsors under the QDIA regulations could extend to investments made in a QDIA prior to the effective date of the regulations if all other conditions were met, and could also extend to investments made into QDIAs at the election of a participant or beneficiary. The relief also extends to non-elective contributions as long as participants were given a choice of where to invest these contributions and made no election.
Although the final regulation provided for QDIA notices to be combined with other notifications to participants such as for automatic contribution arrangements, the FAB clarified that a plan sponsor does not have to combine these notices.
As for the QDIA regulation requirement that a participant be allowed to opt-out of the QDIA within 90 days of the initial investment without penalty, the DoL said the requirement is met if a fee is assessed and the plan sponsor pays the fee rather than charging it to the participant.
The FAB also clarifies that the QDIA safe harbor applies to 403(b) plans that are governed by the Employee Retirement Income Security Act (ERISA), addresses what information on fees must be included in participant notices, and provides clarification of the definition of stable value investment for purposes of the stable value default “grandfather” relief.
The DoL announcement said an updated fact sheet on the default investment regulation can be found at www.dol.gov/ebsa, and technical corrections are to be published in the April 30 edition of the Federal Register.