Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
If President Obama wins a second term, Department of Labor officials will address their concerns about brokerage windows, at least with respect to Section 401(k) plans that offer a brokerage window and no other selected investments, a benefits attorney told BNA Aug. 20.
“They appear to be questioning whether it is a violation of fiduciary duty to offer a brokerage window-only plan,” said Bradford P. Campbell, counsel at Drinker Biddle & Reath in Washington. Campbell was DOL assistant secretary at the Employee Benefits Security Administration under President George W. Bush.
Campbell said he is unaware of problems created by brokerage-window-only plans that would justify DOL's interest. “Brokerage-window-only plans are a perfectly appropriate plan design,” he said.
Until three months ago, when the department issued Field Assistance Bulletin 2012-02 (95 PBD, 5/17/12; 39 BPR 969, 5/22/12), DOL itself had not raised concerns about brokerage windows during several years of notice-and-comment rulemaking, Campbell said. DOL mentioned those concerns again in a revised FAB 2012-02R (146 PBD, 7/31/12; 39 BPR 1473, 8/7/12).
“If [presumptive Republican presidential nominee Mitt] Romney wins, I think this issue goes away unless there is evidence of an actual problem in need of a solution,” Campbell said. “So far, DOL has not made its case,” he said.
Brokerage windows are features in less than about one out of 10 Section 401(k) plans, according to a quick analysis of filings in DOL's Form 5500 series database, an employee of the financial information company BrightScope told BNA Aug. 20.
Slightly less than 8 percent of 401(k) plans offer brokerage windows, said Brooks Herman, the head of research at BrightScope. Nearly 8 percent, or 50,350 Form 5500 series plan filings for 2010, display a 2R code, Herman said. The 2R code on a filing indicates that the plan has a brokerage window.
DOL's Form 5500 series database contains 643,747 401(k) plan filings for 2010, Herman said. The plans with the largest amount of net assets “have a slightly higher occurrence of a brokerage window” than do smaller plans, he added.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)