The fiduciary Safe Harbor provides guidelines under which the Plan Sponsor can implement an Automatic Rollover program with the knowledge that his or her fiduciary responsibilities are being satisfied. These conditions are: 

  • The Plan Sponsor must enter into an Automatic Rollover Agreement with an IRA custodian.

  • Account balances automatically rolled over can't exceed $5,000.

  • The investment product (once the balance is transferred to the IRA custodian) must be a reasonably liquid, conservative investment designed to preserve principal. 

  • The Plan Sponsor must inform all participants of the Automatic Rollover process and investment products offered. 

  • Fees and expenses charged to the account by the IRA custodian must be reasonable (not exceeding those of its comparable IRAs).