Human Resources
Aon Hewitt Submits Comments on Standards for Brokerage Windows in Participant-Directed Retirement Plans

Aon Hewitt Submits Comments on Standards for Brokerage Windows in Participant-Directed Retirement Plans


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On November 19, 2014, Aon Hewitt submitted comments to the Department of Labor (DOL) on the use of brokerage windows in participant-directed individual retirement account plans. Through brokerage windows, plan participants are able to select investment options that are available in the investment marketplace and beyond the set of investment options specifically designated by the plan fiduciary.

In the comment letter, Aon Hewitt addressed a number of specific questions about brokerage windows that were asked by the DOL in its Request for Information, including questions on prevalence and trends, the characteristics of plan participants who use brokerage windows, contracts with service providers, plan fiduciaries’ access to information about brokerage window investments, costs, disclosures to participants, the role of advisers, and fiduciary duties. Statistical data provided to the DOL was drawn from two reports: the Aon Hewitt 2013 Trends & Experience in Defined Contribution Plans Survey and Aon Hewitt 2014 Universe Benchmarks: Measuring Employee Savings and Investing Behavior in Defined Contribution Plans.

Aon Hewitt recommended that additional fiduciary or disclosure obligations not be imposed on plans with brokerage windows, noting that existing disclosure requirements under both DOL and securities rules are already rigorous and that the numerous disclosures currently required under existing rules are sufficient to enable participants to make informed decisions about participating in brokerage windows. In response to a question about whether additional guidance is needed from the DOL, Aon Hewitt suggested that future guidance clarify that investments made by participants through brokerage windows are not subject to the fiduciary requirements under ERISA Section 404(a).

Contributing authors to the Aon Hewitt comment letter included Rob Austin, Alison Borland, Winfield Evens, Jeremy Fritz, Lian Gregory, Diana Jacobson, Kenje Mallot, Christine Matott, Tom Meagher, Jacob Punnoose, Mark Tavares, and Kevin Vandolder.

Aon Hewitt Submits Comments on Standards for Brokerage Windows in Participant-Directed Retirement Plans