The Department of Labor (DOL)-mandated
fee disclosure regulations that took effect
in August 2012 have had a little effect on behavior of retirement
plan participants, according to a BMO Retirement Services survey of 416 plan
sponsors. According to the survey, 80 percent of plan sponsors reported the
disclosure had little or no effect on plan participants.
Under the DOL regulations, plan-
and investment-related fee disclosures must be provided to new hires and
current employees every quarter (usually with their account statements). The
information must also be available online, along with a glossary of investment
terms.
Plan sponsors believe that the
additional disclosures did not change participants’ behavior or their perception
of their retirement savings benefit. The intent of the disclosure was to
provide the educational resources needed for plan participants to help them
understand the investments available along with the fees associated with them.
Only
1 percent of respondents reported seeing either a positive or negative change
in participant behavior. Almost one year after the requirements were put in
place, only 15 percent of plan sponsors considered the new disclosures
confusing to enrollees, compared to 46 percent expressing this concern prior to
when the changes took effect last year.