Retirement Investor Protection: Mandatory Risk Warnings for Self-Directed Accounts.
This Act mandates new disclosure requirements for retirement plans that allow participants to invest outside the core, monitored fund options (known as brokerage windows). Before making any transaction in these self-directed accounts, participants must receive and acknowledge a clear warning stating that these investments lack fiduciary oversight, may incur higher fees, and carry greater risk. This ensures citizens are fully informed about the potential consequences of high-risk retirement investing.
Key points
Mandatory Warnings: Before every transaction in a self-directed brokerage account, you must receive and acknowledge a notice confirming the investment is not monitored by a plan fiduciary.
Risk Transparency: Plans must clearly state that investments outside the designated funds may lead to diminished returns, higher fees, and higher risk.
Future Projection: The notice must include a graph illustrating projected retirement balances based on hypothetical annual returns of 4%, 6%, and 8%.
The law formally defines 'designated investment alternative' to exclude self-directed brokerage windows.
Introduced
Citizen Poll