Brokerage Windows’ Future Unclear
Brokerage windows are relatively rare in most 401(k) plans. Out of the 686 plans surveyed by the Plan Sponsor Council of America in 2012, only 17% of them offered the option.
Not So Transparent:
Brokerage windows are supposed to provide plan participants with access to a greater variety of investments. However, they can be problematic because they typically have additional transaction costs the participant must pay. Employers have a fiduciary duty to make sure fees are no more than reasonable, and that investments are prudently selected for the plans. Nevertheless, investments offered through brokerage windows come with higher, retail-level, ongoing fees; more than what would be available by the plan as a whole, given the plan’s size and bargaining power. The Department of Labor plans to issue a request for comment on brokerage windows in April.
About Schlichter, Bogard & Denton, LLP
Schlichter, Bogard & Denton, LLP is a unique national law firm that represents individuals, including 401(k) plan investors, whose plans suffer from excessive fees or imprudent investment options. Our attorneys are dedicated to helping employees and retirees secure the retirement benefits they deserve. If you have any questions about the fees and investments in your 401(k) or 403(b) plan, please contact Schlichter, Bogard & Denton, LLP at (314) 621-6115 for a free review of your plan.
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