Section 404(c) of the Employee Retirement Income Security Act (ERISA) protects a fiduciary against liability for investment losses arising from allocation choices in employee-directed retirement plans (e.g., 401(k) plans) if certain requirements are met. These requirements include the following: (1) Plan participants must be able to allocate funds among a minimum of three investment choices with substantially different risk and return characteristics; (2) each core investment alternative must be sufficiently diversified; (3) plan participants must have the ability to transfer from or among the investment alternatives at least once every 3 months; (4) participants must be able to transfer from or among the investment alternatives with a frequency that is appropriate to each fund's risk level; and (5) participants must receive sufficient information to make informed decisions about the plan's investment options. However, simply providing employees with options that satisfy Section 404(c) requirements does not safeguard a fiduciary against all lawsuits. Thus, fiduciaries can still be held liable for (1) selecting funds imprudently, (2) failing to monitor the funds for continuing appropriateness or reasonableness of fees, or (3) engaging in a prohibited transaction.