On April 30, 2008, the Employee Benefits Security Administration (”EBSA”) published technical corrections regarding final regulations on qualified default investment alternatives (”QDIAs”) for 401(k) plans. One day earlier, EBSA also issued Field Assistance Bulletin No. 2008-03, which provides further guidance on the QDIA regulations in a question and answer format.

Published on October 24, 2007, the final regulations (1) provided conditions that must be satisfied for an employer to obtain safe harbor relief from fiduciary liability for investment outcomes; (2) identified four types of QDIAs; (3) provided a “grandfather” clause for investment plans in existence before the passage of the 2006 Pension Protection Act and the October 2007 rule; and (4) stated that ERISA supersedes any state law that would prohibit or restrict automatic contribution arrangements, regardless of whether such automatic contribution arrangements qualify for the safe harbor. For more information on the final regulations, see the Department of Labor’s Fact Sheet titled Regulation Relating To Qualified Default Investment Alternatives In Participant-Directed Individual Account Plans.

The technical corrections (1) clarify the preamble example on “roundtrip restrictions”; (2) expand the scope of who can manage a QDIA to include a committee that is named a fiduciary of the plan; and (3) correct the “grandfather” relief for stable value funds.

Finally, EBSA’s Field Assistance Bulletin No. 2008-03 provides further guidance regarding the scope of the final regulations, notice requirements, 90-day limitation on fees and restrictions, 120-day capital preservation qualified default investment alternatives, and grandfather relief for stable value funds.