The Department of Labor is evaluating the use of brokerage windows in 401(k) plans and is offering employers, benefit advisers, and other stakeholders an opportunity to weigh in on the subject.
The DOL Thursday published a request for information on the use of brokerage windows, self-directed brokerage accounts and similar features in 401(k)-type plans. The request comes after the department received an onslaught of questions about brokerage windows following the 2012 publication of a final regulation on participant-level fee disclosure.
Some 401(k)-type plans offer participants access to brokerage windows in addition to, or in place of, specific investment options chosen by the employer or another plan fiduciary. These "window" arrangements can enable or require individual participants to choose for themselves from a broad range of investments.
"We promised employers and other plan sponsors and fiduciaries that we would look into the use of brokerage window features," says Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi.
She said the departments goal in issuing the request for information is to determine whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows may be necessary to adequately protect participants' retirement savings."
The DOL is asking stakeholders to answer several questions regarding brokerage windows, including: the scope of investment options typically available through a window; demographic and other information about participants who commonly use brokerage windows; the process of selecting a brokerage window and provider for a plan; the costs of brokerage windows; and what kind of information about brokerage windows and underlying investment options typically is available and disclosed to participants.
Comments are due by Nov. 19, 2014.
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