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Needs Review Not Apprvd

Self-Directed Brokerage Option Not to Be Implemented

Posted March 18, 2022

For several years, Defined Contribution Retirement Plan members have expressed an interest in the Alaska Retirement Management Board (ARMB) offering a self-directed brokerage (SDB) and have occasionally contacted ARMB trustees and staff requesting the ARMB to implement one. At the direction of the ARMB, the Division of Retirement and Benefits (Division) and Treasury staff worked together to identify objective criteria for an SDB, a vendor was selected, and at the September 2020 ARMB meeting, an action item was approved to implement the Empower Retirement Services self-directed brokerage platform in the Alaska Supplemental Annuity Plan, the Defined Contribution Retirement Plans, and the Deferred Compensation Plan.

As part of the preparations for implementation of the SDB, the Alaska Department of Law and Ice Miller, the Division’s outside counsel, were both consulted. The Department of Law and Ice Miller attorneys cited both the Metcalfe v. State of Alaska and the Hughes v. Northwestern University cases as concerns with the implementation of the SDB. The case of Metcalfe v. State of Alaska reinforces the State’s constitutional guarantee regarding employee retirement systems in terms of diminishment and potentially increases the risk that any losses in the SDB may be subject to claims of diminishment or breach of fiduciary duty. Similarly, Hughes v. Northwestern University raises questions about the State’s ability to delegate fiduciary responsibilities in an SDB. As a result of their analysis of the SDB, the impact of these two relatively new additions to case law, and the new risks posed by these cases, at the March 17, 2022, meeting the ARMB directed the Division not to implement the self-directed brokerage option.

Contact Deputy Director Jim Puckett at if you have any questions.

Page Last Modified: 05/12/22 18:53:48

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