The new retirement plan requirement to disclose all fees will be particularly difficult for non-registered investments, such as bank collective funds, separately managed accounts and annuities, the SPARK Institute warns. Thus, it is developing standards to facilitate disclosure.
“Under the Department of Labor’s participant disclosure regulations, plan sponsors are required to provide participants with information about all of their plans’ investment options in a single chart or similar format to facilitate the comparison of each option offered under the plans,” said Larry Goldbrum, general counsel of the Institute. “However, many investment managers and providers of non-registered investments may be surprised that they will have to make significant new information available in order for plan sponsors to comply with the new regulations.”
Goldbrum added: “Developing the information and cost-effective methods for providing it to plan sponsors and plan recordkeepers could be complex and time consuming. Plan sponsors should act now to ensure that their non-registered investment providers are preparing the information needed.”