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Impact of Fee Disclosure: A success, a failure, or too soon to tell?

Posted on Mar 08, 2013 by  in In the News, Retirement Plans for Business, Retirement Readiness

Over the last several years, retirement plan sponsors and their service providers have spent a lot of time preparing to comply with the DOL’s participant and service provider disclosure rules that became effective in 2012.  Now that the rules have been effective for the better part of a year, many of us in the retirement plan community are trying to figure out whether the disclosures had any meaningful impact.  Unfortunately, the growing consensus appears to be that, at least initially, the disclosures have been pretty well ignored by both employers and participants.  However, whether that remains true in the long-term has been a subject of considerable debate.  A recent NAPA Net article entitled Life After Fee Disclosure, quotes a presenter at the 2013 NAPA/ASPPA 401(k) Summit as stating that “the rules will be a game-changer – eventually.”  Likewise, Gregg Wirth, in his article Early impact of 401(k) fee disclosure rules appears minimal, points out that even though initial reaction by participants and employers has been mostly apathetic, there has been a recorded uptick in participant inquiries and fee benchmarking requests.  While we think it is too soon to know for sure at this point, we certainly hope that all of the hard work in preparing for the new disclosure initiatives will help to promote retirement readiness in the long run.  In your experience, has fee disclosure made any positive impact?

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