For the past 20 years, there has been a strong push for 401(k) plan sponsors to offer participant-directed plans where employees direct their own investments instead of the trustees directing plan investments. The reason was that of technological breakthroughs on the Internet that allowed participants to direct their investment easily, but most importantly ERISA §404(c) participant-directed plans can help a plan sponsor limit their liability for losses sustained by the participant. On paper, it’s too good to be true that a participant-directed plan can limit the plan sponsor’s liability. The problem is that it is on paper and there may be some shocking truths that a plan sponsor is unaware of about these participant directed 401(k) plans. Lucky for them, they have this article to discover these shocking truths.