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Participant assets must be invested in a “Qualified Default Investment Alternative” (QDIA): -  A Lifestyle or Target-Date Retirement Fund; -  A Balanced Fund; -  A Professionally Managed account (taking into account the participant’s age and retirement date); or, -  A capital preservation product, but for only the first 120 days of participation (for example: a money market or stable value fund).  Safe harbor relief will continue to be available only if the fiduciary re-directs the participant’s investment in the capital preservation fund to another QDIA before the end of the 120-day period. Money Market or Stable Value Fund “Grandfather” Relief: In addition to the above, the DOL provides “grandfather” relief under the regulations to Plan Sponsors who adopted a money market or stable value fund as their default investment before the final regulations.  Under this rule, contributions invested in a money market or stable value fund before December 24, 2007 will be considered to be invested in a QDIA if all the other requirements under Section 404(c)(5) are satisfied. Please note that this special rule does not provide relief for contributions defaulted to a stable value fund after December 23, 2007.  To qualify for relief after that date, future contributions will have to be held in one of the four QDIA’s described above. Therefore, if your plan currently has a money market or stable value fund selected as its default investment, the “grandfather” provision allows you to leave the default-invested balances of your participants in this fund.  Going forward, however, default contributions after December 23rd 2007 will have to be directed to a default investment that qualifies as a QDIA to continue to qualify for relief under Section 404(c)(5).

2	Participant must have been provided an opportunity to direct his/her investment and did not elect to do so.

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Participant and Beneficiary Notification Requirements: In general, participants must receive a timely annual written notice of the QDIA: -  Initial Notice:  Generally, the initial notice must be provided to participants and beneficiaries at least 30 days before plan eligibility or before the first default investment for their account.  For plans that provide for automatic enrollment and also allow participants to withdraw from participation by withdrawing their account balance within 90 days, the initial notice may be provided on or before the date of plan eligibility. -  Annual Notice:  This notice is required to be provided at least 30 days before each subsequent plan year.  Thus, if our plan has a calendar year plan year, your first annual notice is due by December 1, 2007. -  Notice Requirement:  The notice must include the following:  1.  The circumstances under which amounts will be invested in a QDIA.  2.  A description of the QDIA, including the investment objective, risk and return characteristics and fees         and expenses.  3.  The participant or beneficiary’s  right to move assets without penalty.  4.  An explanation of how information about the plan’s other investments can be obtained.

4	Participant or Beneficiary must be provided with any material related to the plan regarding their investment. For example: account statements, proxy materials and prospectuses.

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Participant or Beneficiary must be afforded the opportunity to transfer their account without penalty for 90 days. The participant or beneficiary must have the opportunity to transfer assets from the QDIA into another available investment alternative as frequently as other plan investments but not less than quarterly.  Penalties that are not allowed include trading restrictions, fees or expenses (i.e. Short term trading costs) imposed on the transfer.

6	The plan must offer a “broad range of investment alternatives” as defined under 404(c) of ERISA.