On June 27, Connecticut Governor Dannell Malloy passed an act requiring service providers to 403(b)s not subject to the Employee Retirement Income Security Act (ERISA) to disclose conflicts-of-interest.
Non-ERISA plans are not subject to the Department of Labor (DOL) fiduciary rule.
According to the text of the bill as signed by the governor, on or after January 1, 2019, any company that administers a retirement plan offered by a political subdivision of the state to the employees of such political subdivision shall disclose to each participant in such retirement plan the fee ratio and return, net of fees, for each investment under the retirement plan; and the fees paid to any person who, for compensation, engages in the business of providing investment advice to participants in the retirement plan either directly or through publications or writings.
The disclosures are required to be made upon initial enrollment in the retirement plan and at least annually thereafter.
Traditionally, non-ERISA 403(b)s, such as those in the K-12 education market, have allowed for individual contracts between annuity providers and participants.