A DOL request for information – posing 39 questions about the costs, administration and disclosure policies of self-directed brokerage options – elicited 38 responses from industry players, few in favor of any new rules.

Charles Schwab was one of many commenters that suggested the DOL should consider its review of brokerage windows in a "bifurcated manner." 

That's because some sponsors offer brokerage windows in conjunction with the qualified default investments in a 401(k) plan, while others offer their access as the sole option for retirement savings. 

The ERISA Industry Committee echoed that concern. 

"We share the DOL's concerns to the extent that there are participant-directed plans that include brokerage windows as the only investment option in an attempt to avoid various disclosure and regulatory requirements under ERISA," wrote Kathryn Ricard, senior vice president of retirement policy at the ERISA Industry Committee. 

But to impose uniform new regulations on sponsors that offer the windows as an option in a defined contribution plan would create impractical burdens, and have the unintended consequence of forcing many sponsors to discontinue the option, according to ERIC. 

Proponents of brokerage windows say they give sponsors the ability to offer a wide array of investments beyond those selected by fiduciaries. 

ERIC, which represents large plan sponsors, said about half of its members offer brokerage windows. 

In Schwab's comments, Lawrence Bohrer, VP of corporate brokerage retirement services, explained that Schwab does offer brokerage windows to sponsors who use it as the only savings vehicle for participants. But that model is generally adopted by plans in the "micro" space, which Bohrer defines as having plan assets less than $1 million. 

"Often the brokerage-only option allows smaller employers to offer a 401(k) plan to its employees because plan recordkeeping costs typically are less than under a fully 'bundled' service approach," he wrote the DOL. 

Schwab's data shows that only a small percentage of participants choose to access the accounts, but that when they do, they do so eagerly. 

More than 60 percent of the plans Schwab services offer the windows as an alternative to a more limited investment menu, and while only 4 percent of participants access investments through them, they account for 11.8 percent of plan assets. 

Also, on average, those that use the windows invest about 70 percent of their assets through them. 

"Given the already robust level of disclosure, Schwab does not feel there needs to be an expansion of what is required when a brokerage window is adopted as a plan feature," wrote Bohrer. 

Nor are further regulations necessary for sponsors that use brokerage windows as a stand-alone option, according to Schwab. 

"The plan fiduciary making the decision to adopt such a plan design is held to the same overall fiduciary obligations under ERISA." 

One anonymous plan sponsor with about $5 billion in defined contribution assets said increased reporting and disclosure requirements of the kind the DOL is considering would "likely have a negative effect on our ability to offer a brokerage window to our participants." 

The sponsor said it offers 10 other investment options in its investment menu. About 6.3 percent of plan assets are invested through the brokerage window, which has seen moderate and consistent growth since it was implemented in 2002.

Not all the comments were supportive of brokerage windows. 

Jon Sullivan, an advisor with Transamerica Financial Advisors, said brokerage windows don't help employees save for retirement. 

"While self-directed brokerage accounts could potentially be used in the correct manner by sophisticated plan participants, it presents a potentially hazardous situation for less-sophisticated participants," he wrote.