Is it so hard to simply state how much money an employee is paying to participate in a 401(k) plan?
The answer is apparently yes—despite the final adoption last month of the Department of Labor’s ERISA 408(b)(2) fee disclosure rule. While retirement plan service providers are required to provide usable, accurate and complete information about how much compensation they are taking from plan participants, many are skilled at nevertheless burying that information in opaque disclosures and may be relying on DOL’s history of spotty enforcement.
“Many firms are doing nothing and hoping that nobody will come knocking at their door,” says Lou Harvey (left), chief executive of the Boston-based consulting firm Dalbar.
That is why Research Magazine, AdvisorOne and Dalbar are teaming up to cast a brighter light upon the shadowy world of retirement plan fee disclosures by exposing service providers who make it hard for plan sponsors to fulfill their fiduciary obligations, while giving due acknowledgement to those who are models of transparency.
“The Labor Department literally said that the ultimate responsibility is on the plan sponsor to demand the information that they need,” Harvey told AdvisorOne.
Over the next several months, Dalbar will conduct the study, which will analyze and rank the transparency of disclosures, the results of which Research and AdvisorOne will simultaneously publish at the start of the new year.