According to a survey from the Plan Sponsor Council of America (PSCA), Impact of Fee Disclosure Regulation on 403(b) Plan Sponsors and Participants, sponsored by the Principal Financial Group, nearly 97% of 403(b) plans governed by the Employee Retirement Income Security Act (ERISA) complied with the fee disclosure regulations, and nearly 41% of non-ERISA plans complied, even though they were not required to.
Very few plan participants asked questions about the fee information they received—an average of 2.3% of participants among all respondents did so. The majority of plan sponsors (95.9%) reported no noticeable changes in participant behavior.
One‐third of plan sponsors said they used the fee disclosure information they received to benchmark their plans. Of the plans that benchmarked, 64.3% made no changes, 14.3% made changes to their investment lineups and 16.3% changed their participant education efforts. Nearly 20% of 403(b) plan sponsors sent out an RFP/RFI as part of complying with fee disclosure regulations.
The survey found asset management, recordkeeping and trust fees tend to be assessed as a percentage of assets for large plans, whereas small plans tend to pay a flat fee. Per service or transaction fees tend to be a flat rate, though 30% were assessed per participant.The survey report breaks down findings by plan size, ERISA status and industry. The report is at http://www.psca.org/403b-plan-fee-snapshot.
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