Plan sponsors, participants adapting well to new fee disclosure rules, according to new survey from the Plan Sponsor Council of America
December 4, 2012 (Des Moines, Iowa) - New disclosure regulations from the Department of Labor (DOL) haven't resulted in significant changes on the part of 403(b) plan sponsors. And only a very small percentage of participants expressed concern or confusion about the new disclosure information.
"The new disclosure rules constituted a change in how fees and other plan information are reported, and that was cause for some concern on the part of plan sponsors and financial professionals alike. However, our survey shows that both plan sponsors and participants are responding well to the new regulation," says Bob Benish, interim president and executive director, PSCA.
According to the survey:
Only 19.1 percent of 403(b) plan sponsors sent out requests for proposals (RFPs) or requests for information (RFIs) as part of complying with the new regulation.
One-third of plan sponsors used fee disclosure information to benchmark their plans.
Just 2.3 percent of participants asked questions about the fee disclosure information they received.
An overwhelming majority (95.9 percent) of plan sponsors reported no changes in participant behaviors as a result of fee disclosure.
Despite the success of the initial transition, plan sponsors will continue to need help from their financial professionals. "Financial professionals have worked hard to help clients navigate the new disclosure regulation and assess the reasonableness of fees. That is a process that will be ongoing, so the role of financial professionals continues to be important," says Aaron Friedman, national non-profit practice leader, The Principal®.
The Plan Sponsor Council of America (PSCA) is a nonprofit association that provides services, best practice information, and advocacy to defined contribution plan sponsors. Members have access to a broad range of resources and programs that address the varying needs of both small and large companies. Membership includes 1,200 companies ranging in size from Fortune 100 firms to small, entrepreneurial businesses.
The Principal Financial Group® (The Principal®) is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services through its diverse family of companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $392.2 billion in assets under management and serves some 18.3 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG.www.principal.com.