The federal government should change the tax form that retirement plan services companies use to disclose plan expenses.[@@]

Thomas Kinzler, an associate general counsel in the retirement services unit at Massachusetts Mutual Life Insurance Company, Springfield, Mass., gave that advice Thursday at a meeting of the Employee Retirement Income Security Act Advisory Council, according to a written version of his testimony.

The council gives officials at the U.S. Department of Labor ideas about ways to update ERISA and improve ERISA compliance.

Kinzler spoke at a council working group meeting about ways to improve Form 5500, the employee benefit plan tax form.

Insurance companies now report plan costs, such as fees, on Form 5500, Schedule A, after a plan is already in place.

Kinzler recommended that the Labor Department apply Form 5500, Schedule A, to all financial institutions, not just insurance companies, and that the department should revise the form to require disclosure of embedded fees, such as recordkeeping fees, as well as explicit fees.

Kinzler also recommended that investment management companies do a better job of disclosing fees and expenses when employers are buying the plans, rather than waiting to reporting the information on Form 5500.

“The disclosure information provided on the Form 5500 is provided too late,” Kinzler said. “Plan sponsors need information regarding fees at the point of sale.”