Current Issues in the Design and Operation of Defined Contribution Plans

Summer 2011

In the past several years there has been a great deal of legislative and regulatory movement regarding fee disclosure. Essentially, there is a strong feeling that enhanced disclosure will lead to better investment choices by plan participants and more informed decision making by plan fiduciaries when they select service providers. The areas which have been the subject of such scrutiny include:

Service Provider Fee Disclosure (to plan sponsors) – Focusing on requiring service providers to disclose the fees they charge employers that sponsor retirement plans, as well as those fees assessed against the plans themselves.

Fee Disclosure to Plan Participants (from plan sponsors) – There is a concern that participants in individual account plans do not have access to useful plan and investment information to make informed decisions concerning management of their retirement accounts.

Both Congress and the U.S. Department of Labor (“DOL”) have been active in proposing rules in this area. Although legislation is unlikely anytime soon, DOL’s final regulations go into effect in 2012. The following presentation explains the new 2012 playing field for employers, plan fiduciaries, service providers and plan participants in the complex fee disclosure area.

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