Two groups are suggesting that the U.S. Labor Department develop a 401(k) plan “fee menu” to help participants understand the charges associated with their retirement plans.
The American Society of Pension Professionals & Actuaries, Arlington, Va., and the Council of Independent 401(k) Recordkeepers, Arlington, a group that ASPPA recently helped create, have included that idea in a letter to the Labor Department.
The department recently asked for public comments on retirement fees and expenses and ways to improve disclosure of plan cost information.
The fee menu would be a sample fee disclosure form that would list the possible 401(k) fees and expenses that a plan might charge to a participant’s account, ASPPA and CIKR representatives write in the comment letter.
Providing a general, annual discussion of the fees that might be charged would be much less expensive than coming up with a plan-specific fee list, the representatives write.
Other recommendations in the letter:
- Plan fiduciaries should make comparable disclosures available to their participants on an annual basis.
- The Labor Department should consider the most cost-effective way of providing disclosures, to avoid discouraging plan sponsors from offering plans and plan participants from participating in the plans.
ASPPA Executive Director Brian Graff says his group would like to see retirement services companies do as much as possible to police themselves.
“We need to get more done as an industry so we have less need for the government to step up,” Graff says. “Self-regulation is key.”
At ASPPA, “we represent a lot of individuals across the country that have a lot of things to say about what ought to be disclosed,” Graff says.