401(K) Plans: Clearer Regulations Could Help Plan Sponsors Choose Investments for Participants, Report to the Honorable Elizabeth Warren, U.S. Senate   [open pdf - 3MB]

From the Highlights: "DOL [Department of Labor] created a regulatory 'safe harbor' in 2007 to limit plan sponsor liability for investing contributions on behalf of employees into default investments when employees do not otherwise make an election. In addition, DOL identified three default investments that, if selected by sponsors, would qualify a plan for safe harbor protection. GAO [Government Accountability Office] was asked to review certain aspects of these default investment types. This report examines: (1) which options plan sponsors selected as default investments and why; (2) how plan sponsors monitor their default investment selections; and (3) what challenges, if any, plan sponsors report facing when adopting a default investment for their plan. To answer these questions, GAO reviewed relevant federal laws and guidance; analyzed industry survey data on the prevalence of default investment use; analyzed nongeneralizable responses from 227 plan sponsors who voluntarily completed a GAO web-based questionnaire; and interviewed 96 stakeholders, including service providers, advocacy groups, and research organization representatives, as well as academicians"

Report Number:
Public Domain
Retrieved From:
Government Accountability Office: http://www.gao.gov/
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