Fee disclosures create few disruptions to 403(b) sponsors
By Andy Stonehouse
A small piece of good news related to more government regulation: This year's raft of required fee disclosures don't seem to have created a rocky road for 403(b) plan sponsors.
A new Plan Sponsor Council of America survey of those managing 403(b) plans, sponsored by Principal Financial Group, indicates that both sponsors and participants have adapted pretty well to the new changes, with very few in either group making major changes as a result of the new fee information.
Most importantly, just over 19 percent of 403(b) plan sponsors sent out RFPs or RFIs as part of complying with the new regulations, and only 2.3 percent of participants actually asked questions related to the fee disclosure information they received.
A third of plan sponsors reported that they were able to use the fee disclosure information to help benchmark their plans.
But the overwhelming response? No response at all. Nearly 96 percent of plan sponsors reported absolutely no changes in participant behaviors as a result of the fee disclosures.
"Financial professionals have worked hard to help clients navigate the new disclosure regulation and assess the reasonableness of fees," notes Aaron Friedman, national non-profit practice leader for The Principal. "That process will be ongoing, so the role of financial professionals continues to be important."
PSCA executive director Bob Benish says, in retrospect, the survey demonstrates that no news is sometimes good news.
“The new disclosure rules constituted a change in how fees and other plan information are reported, and that was cause for some concern on the part of plan sponsors and financial professionals alike," he said. "However, our survey shows that both plan sponsors and participants are responding well to the new regulation."
Originally published on BenefitsPro.com