Because the Securities and Exchange Commission is now considering making a 2% redemption fee optional, the retirement plan industry has intensified efforts to develop its own solution in accordance with mutual fund providers, InvestmentNews reports. The American Society of Pension Professionals and Actuaries, a trade group representing more than 5,500 pension plan administrators, is in negotiations with a number of leading mutual fund providers, according to a senior official at the organization. The talks are aimed at heading off a proposal by the Investment Company Institute to dock investors with a 2% redemption fee for unloading mutual fund shares within six days of a purchase.
The measure potentially creates an administrative headache for pension plan administrators required to track individual trades by participants. And reports that the SEC is now considering making a redemption fee optional for fund companies has ASPA worrying that it would result in a whole slew of redemption fees. Therefore, they are considering proposing a uniform fee. Regulators, including New York Attorney General Eliot Spitzer, are up in arms about the lack of uniformity in mutual fund redemption regulations for retirement plans. The SEC has said it hopes to resolve the matter by year-end.