The Department of Labor should act to improve disclosure of key information to 401(k) participants by requiring employers to provide them with fee and other key investment option information only at enrollment, a group of trade groups representing plan sponsors and financial services providers are suggesting.
After that, said a comment letter representing the views of the 12 industry trade groups, participants should be notified annually where they can find or how they can request such information.
The recommendations were prepared in response to a DOL request for comment on how potential revisions to existing guidance governing fee disclosure to plan participants.
The 12 associations include the American Council of Life Insurers, the American Bankers Association, American Benefits Council, the Committee on Investment of Employee Benefit Assets, the ERISA Industry Committee, the Financial Services Roundtable, Investment Company Institute, National Association of Manufacturers, Profit Sharing/401(k) Council of America, Securities Industry and Financial Markets Association, Society for Human Resource Management, and the U.S. Chamber of Commerce.
The comment letter urged the DOL “to avoid the temptation to overload participants with detailed and voluminous information that can impair sound decision-making.”
“Any new disclosure regime must recognize that plan sponsors and plan participants have markedly different disclosure needs,” the letter said.