Concerns over Self-Directed Brokerage in 401(k)

DoL Guidance Raises Concerns of Offering Self Directed Brokerage Options in 401(k) Plans

On August 30, 2012, all defined contribution plan sponsors must provide fee and expense information to their plan’s participants nut he new participant␣-level fee disclosures required by ERISA 404(a)(5). To clarify plan sponsors’ obligations, the United States Department of Labor (DoL) recently issued Field Assistance Bulletin (FAB) 2012-02, which provides question-and-answer guidance. Possibly the biggest red flag in the FAB is the disclosure requirement for plans that offer brokerage windows and self-directed brokerage account options to plan participants and beneficiaries. All plan sponsors who currently offer a brokerage account option or who are considering offering one should immediately consider the impact of the FAB on their fiduciary obligations and act accordingly.

Read the full report from Lockton here >> 07.13.12 Self Directed

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.

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