Under the plan, Ibbotson Associates of Chicago, a well-known firm specializing in asset-allocation will gather information regarding the individual retirement needs of SunAmerica 401(k) investors, using computer programs to come up with an allocation of stock and bond funds and other investments such as money-market funds that best suits the investor. The portfolio would also be reviewed regularly, and the mix of assets rebalanced, again relying on the asset strategy generated by the computer programs.

Until now, the Labor Department had said that under Erisa (the Employee Retirement Income Security Act), the most that an employer-sponsored plan could do would be to come up with investing recommendations for the participants to either follow or ignore. The new decision goes much further than that by allowing investors to hand over all decision making to professionals.

The decision may have taken account of legislation in Congress, backed by the Labor Department, which seeks to give broader freedom to financial services providers to give advice on 401(k) savings plans, and the fact the decision was made as an "advisory opinion" means it can apply to other companies if they structure plans in the same way without having to go through the time-consuming process of seeking separate approval from the Labor Department.

"Any 401(k) provider in the country is now able to offer investment advice if they hire a qualified independent financial expert, which is not a big problem," Linda Shore, an attorney with Buchanan Ingersoll in Washington, told the Wall Street Journal. "It really opens up the market phenomenally," says Ms. Shore.

In approving the SunAmerica program, the Labor Department said it was satisfied that Ibbotson is independent from SunAmerica, because Ibbotson can't receive more than 5% of its gross income from SunAmerica, and SunAmerica will play no role in the development of the asset-allocation programs. In addition, while SunAmerica can fire Ibbotson, that decision can't be based on how much it earns in fund-management fees from the portfolios constructed by Ibbotson, the Department said.