Florida State Board of Administration, Tallahassee, plans to offer, effective Jan. 2, participant-directed brokerage accounts managed by Hewitt Financial Services as an investment option for the Florida Retirement System's $8.4 billion 401(a) defined contribution plan, said Dennis D. MacKee, FSBA director of communications.
FSBA, which oversees a total of $170.1 billion in assets including the 401(a) fund, didn't do a search.
HFS is a unit of Aon Hewitt, the plan's record keeper, whose existing contract calls for providing such services should FSBA put it in place, Mr. MacKee said.
FSBA currently has a search underway for a 401(a) record keeper. Aon Hewitt is one of the finalists. A new record-keeper contract, including the brokerage services, would begin January 2015. HFS would manage the brokerage services for only the next year in the event of a selection of a new record-keeping firm, Mr. MacKee said.
FSBA added the brokerage window in response to requests by participants and in anticipation of legislative proposals for the services, Mr. MacKee said.
The 401(a) now offers 21 funds as investment options, which are unaffected.
The brokerage window will enable participants to invest in stocks listed on any Securities and Exchange Commission-regulated exchange; non-leveraged exchange-traded funds; mutual funds, except the plan's options; and fixed-income products. The window's exclusions include direct investing in derivatives, margin investing, limited partnerships or any investment that would jeopardize the plan's tax-qualified status.
The FSBA's investment advisory council updated the 401(a) investment policy statement in October to authorize the window, Mr. MacKee said.