The employer has three main areas of responsibility. If these three responsibilities are observed, as detailed below, the company will be in compliance with the regulations. The participants must have a broad range of diversified investment alternatives from which to choose.
Investments having materially different risk and return characteristics are preferable.
The participants must have the ability to exercise control over the assets in their accounts. They must be able to make transfers between any of the three core investment options at least once during any three-month period. The requirement to allow quarterly investment transfers does not apply to investment options beyond the three, broad-range core options. If other investment options allow more frequent transfers, then core options must offer the same flexibility. More frequent transfers must also be allowed when market volatility warrants increased flexibility.