Trust Updates Archive

20050808BSA Auto Enrollment to Double 401k Funds

(Oct. 3, 2006--Chicago, IL)--Following closely on the heels of the Pension Protection Act of 2006 which removed impediments to automatic enrollment in 401k plans, the U.S. Department of Labor has proposed regulations allowing fiduciaries to invest funds absent participant investment directions.
The proposed regulation outlines a 6-step process which provide fiduciaries with a safe harbor for investing participants' funds. These include various notifications to the participant regarding the proposed investments as well as giving them the opportunity to make their own investment decisions. Investments made under the regulation's safe harbor must be "qualified default investment alternatives," which the regulation defines. With the exception of employer securities, the definition of QDIAs appears fairly broad.
A copy of the proposed regulation is available at

For more information, see the October issue of Trust Regulatory News.

No statement in this issue is offered as or should be
construed as legal opinion or advice

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