Further Guidance Possible Regarding Brokerage Windows

July 11, 2012 ( - An official from the Department of Labor (DOL) said further guidance may be issued regarding the treatment of brokerage windows in participant fee disclosures.

By Corie Russell | July 11, 2012

In May, the DOL issued Field Assistance Bulletin 2012-03, which answers questions about the participant fee disclosure regulations that go into effect August 30 (see “DOL Issues Additional Guidance for Participant Fee Disclosures”). Since the Bulletin’s release, some in the retirement industry have expressed concern about the DOL’s answer to question 30, which relates to brokerage windows.

Kristen Zarenko, senior benefits counsel for the DOL’s Division of Regulations, said during ASPPA’s Northeast Area Benefits Conference that dialogue about the entire Bulletin is ongoing. To her knowledge, no final decisions about question 30 have been made, but she foresees the DOL will issue additional guidance.

Question 30 asks whether the platform itself is considered a designated investment alternative (DIA) when a plan offers an investment platform with many registered mutual funds of multiple fund families to which participants and beneficiaries may direct the investment of assets held in or contributed to their individual accounts. It adds that although the plan fiduciary selected the platform provider, the fiduciary did not designate any of the funds on the platform as “designated investment alternatives” under the plan.

Industry professionals have been surprised by the DOL’s answer (see “DOL’s Answer in Fee Disclosure Guidance ‘Surprising’”). Several associations have asked for complete withdrawal of question 30, said Robert Kaplan, vice president, national training consultant for ING.

Although questions loom about the Bulletin, Zarenko said plan fiduciaries will hopefully find some relief from question 30 by the DOL’s answer to question 37. The DOL answered question 37 by saying that it will take into account whether covered service providers and plan administrators have acted in good faith based on a reasonable interpretation of the new regulations.

The Field Assistance Bulletin is available here.