Self-directed brokerage accounts are the ERISA version of cicadas for defined contribution regulations — they generate a bit of buzz periodically but then go quiet.
Seven years ago, the DC industry made a lot of noise when the Department of Labor issued a 39-question request for information about whether brokerage accounts merited more federal regulation. The Labor Department didn't act on the RFI, and the issue disappeared from view until late last month, when the ERISA Advisory Council held a hearing in which DC industry members testified that additional regulation isn't necessary and could be expensive and counterproductive.
Another public hearing will be held Aug. 26-27, and the council will hold two public meetings later this year to discuss their findings and recommendations, which it will send to the Employee Benefit Security Administration. The council's membership includes representatives from the public, employers, unions, investment managers and other financial firms.
The council "will study the nature and extent of disclosures that plan participants receive, which plan participants use brokerage windows, and in what manner," says a notice on the council's website. The wants to know "whether guidance would be appropriate and necessary to ensure that plan participants and beneficiaries with access to a brokerage window are adequately informed and protected under ERISA," the website says.