NEWS & PRODUCTS, June 2007

SEC Chairman Christopher Cox said the SEC’s examination of what goes into a 401(k)–such as expenses of the underlying funds–which the regulator is performing in tandem with the Department of Labor should be showing “progress” in the next few months. Cox, who made his comments May 10 at the Investment Company Institute’s (ICI) annual conference in Washington, added that because millions of Americans are charged with saving for their retirement, they are now “going to be active investors,” and the SEC wants to ensure they have the proper disclosures available to them about what they are investing in. To this end, Cox said the SEC is examining the different types of disclosures that investors receive so that they can “make sound decisions.”

ICI Chairman Martin Flanagan echoed Cox’s sentiments about clearer disclosures during comments May 9 at the annual event, saying that the mutual fund industry is committed to ensuring that investors in 401(k)s get better disclosures than they’re currently offered. Whether their 401(k)s–which have accumulated $2.7 trillion in assets–are invested in mutual funds, annuities, or other products, “workers and [plan sponsors] need the same clear and transparent information,” Flanagan said.

The ICI released a report May 7 revealing that Americans held a record $16.4 trillion in retirement assets at the end of 2006, up $1.7 trillion from the previous year, or a 12% increase. At year-end 2006, investors held $8.3 trillion in IRAs and defined contribution plans, accounting for about half of the entire retirement market, ICI said.