Question #5 of the DOL's "FAQs About The 2009 Form 5500 Schedule C" says the following:

Q5: Are the requirements to report indirect compensation on Schedule C different for participant-selected investments through “open brokerage” windows?

“Open brokerage windows” in self-directed 401(k) plans allow plan participants to invest in a wide range of funds, stocks, bonds and other investments offered through a designated broker for the brokerage window. Although the requirement to report indirect compensation applies to participant-selected investments from a range of investment alternatives under the plan, in the absence of any other guidance, Schedule C reporting can be limited to direct and indirect compensation received by the designated broker(s) and other brokerage window providers, transaction fees in connection with the purchase, sales, or exchanges made through the brokerage window, and any other plan-related fees. This limitation on reporting for Schedule C purposes does not relieve fiduciaries from obligations to prudently select and monitor designated brokers or other brokerage window providers in a brokerage window option under the plan.

I'm probably missing something obvious, but exactly what is it that the open brokerage accounts are being exempted from reporting?

I've continued thinking about this issue since I posted it and have read and re-read the Schedule C instructions and the FAQ so many times I almost have them memorized.

I have come to the conclusion that Q5 of the DOL's FAQ on Schedule C is not saying that the definition of indirect compensation is limited with regards to open brokerage accounts, but rather that the service-providers who have to be reported as receiving indirect compensation with regards to the open brokerage accounts is limited.

Does anyone have thoughts on this interpretation?

Laura

Anyone?


Is the lack of reponse because I've stated the obvious and no one wants to make me feel like an idiot by saying so? Or is it because everyone is as confused as I am as to how to satisfy the Schedule C fee disclosure rules with regards to open brokerage accounts?


Laura