DoL Allows Summarized SBDA Accounting

December 17, 2001 ( - Plan sponsors with self-directed brokerage accounts got a break when Department of Labor (DoL) officials said they could lump together assets held through the brokerage on their Form 5500.

John Canary, chief of the Division of Coverage, Reporting & Disclosure in the Pension and Welfare Benefits Administration, said in a December 12 letter that officials would modify their 2001 instructions for Form 5500 to allow brokerage reporting:

  • broken down by asset class – stocks, bonds, etc. – as it is now
  • collected into a single figure for assets and another for investment income before expenses.

ERISA lawyer Steve Saxon had repeatedly lobbied the Labor Department on the issue, saying the old way represented “a time-consuming, error-prone and expensive task.”

The DoL may have agreed to an industry change but it wasn’t a regulatory retreat. In Canary’s December 12 letter to Saxon, he cautioned that the recordkeeping rule change didn’t lift traditional responsibilities from plan sponsors.

The change, Canary wrote, “in no way relieves fiduciaries of individual account plans with brokerage windows from their obligation to prudently select and monitor designated plan investment options and brokers.”