To amend the Employee Retirement Income Security Act of 1974 to ensure that pension plans provide notice to participants and beneficiaries on risks associated with certain investments, and for other purposes.
This bill amends the federal pension law known as ERISA to require additional disclosures for retirement plan participants who invest through "brokerage windows"—self-directed investment options that let individuals choose investments beyond the standard menu selected and monitored by plan fiduciaries. Under the bill, before directing money into, out of, or within such a brokerage window, participants must be notified and must acknowledge that these investments are not vetted by plan fiduciaries and could carry higher fees, higher risk, or lower returns than the plan's standard designated options. The notice must also include a graph illustrating projected retirement account balances at age 67 based on hypothetical annual returns of 4, 6, and 8 percent. This affects workers and retirees participating in employer-sponsored retirement plans, such as 401(k)s, that offer brokerage window options, as well as the plan administrators who must implement the new disclosure requirements. The changes would take effect on January 1, 2025.
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