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Brokerage Windows and Retirement Plans

Posted By NIPA Headquarters, Monday, January 7, 2013

By Fred Reish, Partner/Chair, Fiduciary Services, ERISA Team at Drinker Biddle & Reath LLP 

When the Department of Labor issued Field Assistant Bulletin (FAB) 2012-02, the private sector was "shocked” by the DOL’s position on fiduciary responsibilities for brokerage windows in defined contribution plans, such as 401(k) plans. The DOL subsequently partially reversed part of its guidance. However, significant portions of that guidance remain, and it continues to be a DOL position that plan sponsors have fiduciary responsibilities for brokerage windows in retirement plans.

My partner, Bruce Ashton, and I recently wrote an article about brokerage windows for TD Ameritrade. As explained in the introduction to the article:

"The first topic of this article, and its principal focus, is the fiduciary process for deciding whether to offer a brokerage window and selecting the provider of the window. The second covers the requirements under the new participant disclosure rules. Finally, we consider the implications of the fiduciaries or a participant selecting an RIA to serve as an investment manager or advisor for a participant’s individual brokerage window.”

We think the article is a valuable contribution to understanding the fiduciary responsibility for brokerage accounts and retirement plans. You can obtain a copy here; once on the TDA home page, search for "brokerage window” in the search field on the upper right of the screen.

We hope the article is helpful to you.

Article provided by Fred Reish. Reish is a partner Drinker Biddle in Los Angeles. He works in the firm's Employee Benefits & Executive Compensation Practice Group and is chair of the Financial Services ERISA Team. He has specialized in employee benefits law since 1973 and works with both private and public sector entities and their plans and fiduciaries; representation of plans, employers and fiduciaries before the governing agencies (e.g., the IRS and the DOL); consulting with banks, trust companies, insurance companies and mutual fund management companies on 401(k) investment products and issues related to plan investments; and representation of broker-dealers and registered investment advisers on issues related to fiduciary status and compliance, prohibited transactions and internal procedures.

Tags:  brokerage windows  defined contribution plans  National Institute of Pension Administrators  NIPA  NIPA News 

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