It appears the regulators are intent on ensuring that plan participants are using prudent portfolios when investing for retirement. Investors have been conned by the financial institutions into believing that someone can consistently beat the market. This belief has hurt all investors investing for a long term goal.

The May 7 guidance document enumerated conditions in which investments in self-directed brokerage accounts or brokerage windows could be considered designated investment alternatives under ERISA. If so, such investments would be subject to greater monitoring of the investments and greater fiduciary responsibility for the investments by plan executives.

If this rule becomes law plan sponsors will need to rethink their position on offering the brokerage window option in their plan. It will increase plan sponsors responsibilities and liabilities. If the owner wants this option for himself/herself they must offer it to all plan participants.

Please comment or call to discuss how this affects you and your company sponsored retirement plan.