Apparently bowing to political pressure, the DOL changed its mind and gave a tepid “oh all right” to plans that allow individual brokerage accounts with effectively unlimited choices. (See last post for background on what that means and how and why they originally put the damper on them.)
On July 30, they replaced the offending Q&A 30 with a new one, Q&A 39, that does away with the onerous detailed disclosures. It’s worth noting that they included some ominous language, like “Nonetheless, in the case of a 401(k) or other individual account plan covered under the regulation, a plan fiduciary’s failure to designate investment alternatives, for example, to avoid investment disclosures under the regulation, raises questions under ERISA section 404(a)’s general statutory fiduciary duties of prudence and loyalty.”
So, it’s “never mind for now, but we really don’t like these accounts and might be back later.”
Of interest to political junkies is that the change came after they got pressured by Fidelity and other big houses who have a lot of these accounts, including getting a letter from Senator John Kerry, who was somehow involved (but one has to wonder how he knew or cared – any time I tried to explain this to anyone, even those who were directly affected, I got blank stares).