Individual directed brokerage accounts (IDAs) are increasingly popular with both plan participants and plan sponsors. However, offering IDA’s introduces numerous fiduciary [3] issues, operational concerns and potential tax problems for plan sponsors. Fortunately, there are several practical approaches that a sponsor can adopt to more effectively manage liability, operational and cost issues. In addition, the article illustrates a transition plan for moving from a less effective to a more effective brokerage account structure.
Download Individually Directed Accounts in Defined Contribution Plans [4].
This article originally appeared in the August, 1997 issue of Employee Benefit Plan Review.