SURVEY SAYS: Reaction to Fee Disclosures

September 4, 2012 ( - Last week we covered a survey that indicated participants’ reaction to fee disclosures would be minimal because many do not read plan disclosures or do not know what to do with information given to them.

I asked NewsDash readers, how do you think your plan participants will react to fee disclosures?  

A large majority (86%) indicated participant reaction would be minimal, if there was any. Fourteen percent said they expect a little reaction from some group(s), but not a big deal. No responding readers expected a lot of reaction from participants.  

While 38% of respondents said they think participants will be satisfied with the fees for their plans, 62% said participants would not understand or care. 

Many readers seemed to be responding based on experience.  In the verbatim comments, most said they had already sent fee disclosure information to participants and had received no reaction. Editor’s choice goes to the reader who said, “If I am like them, I received my own statement and thought what a waste of paper!”


Our disclosures have been distributed and we have heard crickets. 


We have been disclosing fees for more than 10 years and we've gotten little to no reaction so I doubt if these disclosures will produce any different results. 


Our participants received the fee disclosure notices in the mail last week, and I have not heard one comment yet. 


I doubt they will read it as it looks overwhelming. It's over one page and there aren't any pictures and very little white space. 


Most participants will open the disclosure in about a month, look at it, decide it is too long to read now, and go get a beer/turn on a game. End of fee disclosure discussion. When they see hard dollar numbers in October or November they might complain. 


Very few of our participants read the SPD and prefer to ask questions over the phone. It was not a surprise to get little reaction to the fee disclosures. 


I think we will have the "average" reaction...some will read and care, most will not. 


Most don't read the notices and could care less. All they want is to see that they are making money. If it costs them some, okay! 


We've already sent our required notices as well as an informative memo to currently employed participants. Got one "thank you - good information" and nothing else. Law firm environment. 


I mailed the notices out last Friday (8/24) and have not had a single phone call so far. (8/30) 


Participants only care about how their particular account is doing. If they see total value going up, they're ok. As our company pays most all of the fees of the Plan, except for a few select funds which participants don't have to choose, most are satisfied. The fees are what the company pays. As long as those fees are not passed down to them, it's ok.

Verbatim (cont.)  

We included our fee disclosure information with our 2nd Qtr statements, and I've had NO feedback. 


I have already sent our fee disclosures out, and not one employee has said anything about them. 


Our plan fees are very low. I sent the notices out a month ago and have received not one call or comment. 


Sent ours out last week, have not heard one peep. 


If I am like them, I received my own statement and thought what a waste of paper! 


Our fee disclosure information went out 4 weeks ago and I have not gotten one question from anyone. That could be because our quarterly statements went out also and they were very positive. 


We sent disclosures a month ago and have not had one call to HR yet. 


In all the years that I have been managing a DC plan I have only ever had two inquiries about fees, both over a year ago when this item first hit the news. I can't even get them to go the the web page and view their accounts much less understand how fees are negotiated by a large plan as compared to just them with a personal financial broker. 


Although disclosure is a good idea, the government isn't capable of doing anything simply. Therefore, the disclosure has become a monster document. One or two percent of participants will read it (once) and a very VERY small handful will ever look at it again. It's a good thing the government has made us spend so much money to get these done. 


Surprise! Surprise! Main stream America does not read what is forced on them by East Coast government lawyers whose sole job every day is to write in legalese explanations of plans that occupy less than .01% of their waking time in the first place. Our tax dollars at work. 


Sent the plan fee disclosure out a couple of weeks ago. Haven't heard a peep out of anyone regarding it. 


this is a ton of extra work and cost added to the system for very little value added. the mandate should have been that if people ask, the information must be provided. another mandated notice is not effective and just adds more noise to the participants so key employer messages are lost. 


We have disclosed fees at this level of detail to participants for many years, so this information will not surprise our plan participants. 


We rolled the fee disclosures out with the 2nd Quarter statements. There has not been one single comment or question. That's right. Not one. Hello? Anybody out there??? 


What a waste of time and money to go through this exercise. 


Some confusion, not sure what they are reading or what to do with the document. 


The disclosures are too long and complicated for anyone to understand, including plan sponsors. Even if the participants try to understand it, they aren't going to be able to. 


Our fee disclosures went out a month and a half ago. We received zero responses.

Verbatim (cont.)  

We are a service provider that released participant disclosures to our clients earlier than the mandated deadline. There has been minimal reaction from participants and their employers. The plans serviced cover approximately 600,000 participants. 


We have already mailed our required fee disclosures and had absolutely no reaction to the notice. Either they didn't read it, didn't care, or didn't understand. No matter, we killed a lot of trees for nothing. If we could have sent this electronically, at least it wouldn't have been so bad. 


WE already disclose this information, so there should not be much reaction at all, as there is no new information 


Our participant fee disclosure was distributed last week and we have not received any questions or comments. 


We've already sent ours out and didn't hear a peep from anyone. 


Have you SEEN these "disclosures?" Honestly, these were created by the same people who think that a mutual fund prospectus is readable. Don't get me wrong, we have to start somewhere - and I keep reminding myself that these really are intended to provide more/better information about the investments (including fees), but are not truly just "fee disclosures". I think it's important that people not only know what they are paying, but understand that they are paying something. Too often I think employees don't appreciate the cost of the benefits they frequently take for granted (just wait till they see healthcare costs on the W2 - and are taxed on this, cause you know THAT'S coming!). With time and some education, this first step may bear fruit - but for now, I think it's mostly going to be akin to shipping out that SPD that nobody seems to read (either). 


We've already communicated them and did not get so much as one question or comment. 



NOTE: Verbatim responses reflect the opinions of individual readers and not the stance of Asset International or its affiliates.