• Section 404(c) of the Employee Retirement Income Security Act is section 404(c) of the Employee Retirement Income Security Act (ERISA) that protects the trustee from liability for investment losses arising from the choice of allocation in employee-focused pension plans ( for example, 401(k) plans) subject to certain requirements. These requirements include: (1) Plan participants must be able to allocate funds among at least three investment options with substantially different risk and return characteristics; (2) each major investment option should be sufficiently diversified; (3) plan members must be able to switch from or between investment options at least once every 3 months; (4) participants should be able to transfer between investment options at a frequency appropriate to the level of risk of each fund; and (5) participants must be provided with sufficient information to make informed decisions about the plan’s investment options. However, simply providing employees with options that meet the requirements of Section 404(c) does not protect the trustee from all lawsuits. Thus, fiduciaries can still be held liable for (1) unwise choice of funds, (2) failure to monitor funds for the ongoing appropriateness or reasonableness of fees, or (3) engaging in a prohibited transaction.