ASPPA Supports DOL Fee Disclosure
Transparency Key for Plan Participants & Providers
ARLINGTON, VA, (July 15, 2010) –The following is a statement from Brian Graff, executive director/CEO of the American Society of Pension Professionals & Actuaries (ASPPA) in response to the U.S. Department of Labor’s (DOL) recently released 408(b)(2) regulations which impose new fee disclosure requirements on retirement plan service providers.
“We commend the U.S. Department of Labor (DOL) for issuing regulations that will bring greater transparency and disclosure of fees charged to retirement plans. We believe these new fee disclosure rules benefit both plan sponsors and providers. Providers now have clear guidance on what disclosures are required and plan sponsors will have the information they need to make informed choices about their retirement plans.
Defined contribution plans, such as 401(k) plans, serve as the primary retirement savings account for many American workers—but the fees and expenses charged to these plan accounts can add up over time to take a substantial bite out of retirees’ retirement savings. Thanks to the new DOL guidance, the rules on fee disclosure will be applied in a uniform manner to all retirement service providers, regardless of how plan services are delivered.
In order to meet their fiduciary responsibilities under ERISA, plan sponsors need to make an “apples to apples” comparison of the fees charged by retirement plan service providers. Complete and consistent fee disclosure, including the specific requirement for the disclosure of fees associated with recordkeeping services, is now the standard for both bundled and unbundled service providers. By promoting fair competition, these new fee disclosure requirements will help ensure that the fees paid by plan sponsors and participants for retirement plan services are reasonable.
ASPPA and its affiliated organizations, which include the Council of Independent 401(k) Recordkeepers (CIKR), and the National Association of Independent Retirement Plan Advisors (NAIRPA), have long advocated for required disclosure of fees for retirement plan services such as investment management, recordkeeping and administration, and transaction based charges. Such information will allow plan sponsors to make educated decisions about how to operate their retirement plans to the ultimate benefit of plan participants.
ASPPA, CIKR and NAIRPA applaud the DOL’s decision to amend the regulation under ERISA Section 408(b)(2) and look forward to working with DOL on the transition required to implement the immense changes required by the new regulations.”
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About ASPPA: The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 7,000 retirement plan and benefits professionals that serves as the educator, voice, and advocate for the employer-based retirement system. ASPPA members are administrators, actuaries, advisors, attorneys, accountants, and other financial services professionals who provide consulting and administrative services for qualified retirement plans.
About CIKR: The Council of Independent 401(k) Recordkeepers (CIKR) is a national organization of 401(k) plan service providers. CIKR members are unique in that they are primarily in the business of providing retirement plan services as compared to financial services companies who primarily are in the business of selling investments. Collectively the members of CIKR provide services for over 68,000 retirement plans covering 2.8 million participants and holding in excess of $120 billion in assets.
About NAIRPA: The National Association of Independent Retirement Plan Advisors (NAIRPA) is a national organization of firms which provide independent investment advice to retirement plans and participants. NAIRPA’s members are registered investment advisors whose fees for investment advisory services do not vary with the investment options selected by the plan or participants. In addition, NAIRPA members commit to disclosing expected fees in advance of an engagement, reporting fees annually thereafter and agreeing to serve as a plan fiduciary with respect to all plans for which it serves as a retirement plan advisor.
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