Sponsors Need Help Following Fee Disclosure Deadline

September 7, 2012 ( - Although the 404(a)(5) participant fee disclosure deadline has passed, advisers continue to play an important role in helping plan sponsors and participants understand fee disclosure statements.

By Corie Russell | September 07, 2012
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According to the 2011 Deloitte 401(k) Benchmarking Survey, one-third of plan sponsors are unfamiliar with the new fee disclosure rules. When participants receive their third-quarter statements reflecting this disclosure information, plan sponsors may have difficulty explaining the numbers.   

Although many participants will not read their statements, at least one employee from each company will, Bob Kaplan, vice president, national training consultant at ING Investment Management contended during an ING retirement perspectives webcast, “Five Things Advisors Must Remember About Participant Fee Disclosure.” The webcast outlined several action points for advisers to help sponsors in the aftermath of the participant fee disclosure deadline.  

Manage Sponsor Expectations    

Kaplan’s first tip is to manage plan sponsor expectations. Plan sponsors and advisers should work together to ensure participants do not dwell on fees and, as a result, forget why they are saving in the first place, he said.   

In addition to preparing participants for disclosure information, advisers should evaluate the services being provided to sponsors and participants. “When the service is there, fees are not really an issue,” Kaplan said.