Sponsors (2)
The bill improves disclosures and fiduciary clarity for self-directed brokerage windows—potentially helping retirement decision-making—but imposes compliance costs and friction that could mislead some participants, reduce convenience, or prompt plans (especially small ones) to limit investment options.
Seniors and other participants who use self-directed brokerage windows receive clearer warnings and pre-trade projections, helping reduce the risk of poor investment choices near retirement.
Participants get standardized return projections (4%, 6%, 8%), making it easier to compare likely retirement outcomes across plan options and brokerage choices.
Clarifying the term 'designated investment alternative' reduces fiduciary ambiguity and can improve plan governance by distinguishing fiduciary-selected options from self-directed brokerage investments.
Plan sponsors will face increased administrative and compliance costs to produce and track acknowledgements, disproportionately burdening smaller plans and potentially leading to higher fees or reduced plan offerings for participants.
Frequent acknowledgement requirements create friction for participants who want to make quick trades, reducing the convenience and flexibility of self-directed accounts.
Standardized fixed-rate projections (e.g., 4/6/8%) may mislead some participants by implying predictable returns and understating downside risk of self-directed investments.
Based on analysis of 2 sections of legislative text.
Introduced October 30, 2025 by James E. Banks · Last progress October 30, 2025
Requires retirement plans that offer brokerage windows or other self-directed, non-designated investment options to give participants a specific notice and obtain an acknowledgement each time they direct money into, out of, or within those arrangements. The notice must be substantially similar to a four-part disclosure and include an illustrative graph projecting retirement balances at age 67 under 4%, 6%, and 8% annual returns; the rule takes effect January 1, 2026. The change narrows when a participant is treated as exercising control (which affects plan fiduciary liability under ERISA). Plans, recordkeepers, and brokers will need processes to deliver the notice and capture acknowledgements before participant-directed trades in these non-designated options can proceed.