Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. Online
May 04, 2009 01:00 AM

Fund fee reform still urgent: Schapiro

Sara Hansard
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The Securities and Exchange Commission plans to re-examine the issue of 12(b)-1 fee reform, Chairman Mary Schapiro pledged at the Mutual Fund Directors Forum Annual Policy Conference in Washington.

    “I am absolutely committed to a meaningful and open-minded review of Rule 12(b)-1,” she told 170 independent mutual fund directors who attended the conference.

    The Mutual Fund Directors Forum is located in Washington.

    Modification of the controversial fees, which are charged against mutual fund assets to pay for distribution and service expenses, “is an area in need of reconsideration, and the SEC will pursue that reconsideration with the interests of investors first and foremost in our minds,” Ms. Schapiro said.

    However, reforms directly intended to stem the financial crisis have higher priority, she said.

    Earlier this year, SEC Division of Investment Management Director Andrew “Buddy” Donohue said that the SEC’s review of the fees would be delayed for at least a year, due to more pressing matters of that the SEC must deal with due to the financial crisis.

    But the SEC chairman denied that the agency had put off dealing with 12(b)-1 fees.

    “There’s nothing causing a change,” Ms. Schaprio told reporters after her speech.

    “It’s an important issue. We have these short-term things that are very much a direct response to the financial crisis, and would like to get through those,” she said.

    Ms. Schapiro declined to give a time frame for 12(b)-1 reform.

    “There’s a practical limitation to how much you can push through the process at one moment,” and the SEC agenda is “pretty well” full for the year, she said.

    Target-date disclosure on agenda too

    Also on the agenda for the coming year is scrutiny of new disclosure requirements for target date funds, Ms. Schapiro said.

    The funds, which are sold as investments that reduce risk as investors age, are likely to grow in popularity because many 401(k) plans include them as default investments, she noted. About $152 billion was in the funds in March.

    The funds “have produced some troubling results,” Ms. Schapiro said.

    The average loss in 2008 among 31 funds with a 2010 retirement date was about 25%, and the returns varied widely from -3.6% to -41%, she said.

    Funds that allocate assets based on the assumption that investors will continue to maintain part of their investments after retirement need to be better disclosed to investors, Ms. Schapiro said.

    Target date funds intended for use in Section 529 college savings plans need to more closely track the target date, she added and the SEC is looking at whether the same target date funds are used in both retirement and college savings plans.

    Additional controls may be imposed by the SEC on the use of particular target dates in a fund’s name, which may mislead investors, Ms. Schapiro said. She challenged fund directors to review target date fund asset allocations and investments to make sure they are consistent with investor expectations.

    The SEC staff is working with the Department of Labor on the issue, and Senate Special Committee on Aging Herb Kohl, D-Wis., is looking at the issue as well, she added.

    Permitting institutional shareholders to nominating company directors will be taken up soon by the SEC as well, Ms. Schapiro said.

    “Enabling investors to participate meaningfully in the nomination of directors through proxy access will foster a sense of enhanced legitimacy to the director-nomination process and promote investor confidence,” she said in her speech.

    Ms. Schapiro downplayed the possibility that unions or public pensions will be able to have undue influence over company boards. Most other developed countries have allowed greater proxy access for investors, she noted.

    Sara Hansard is a reporter at InvestmentNews, a sister publication of Pensions & Investments

    Recommended for You
    martin_luther_king_day_generic_i.jpg
    No P&I Daily on Martin Luther King Jr. Day
    Closed sign
    No P&I Daily over the holidays
    Happy_Thanksgiving_i.jpg
    No P&I Daily for Thanksgiving holiday
    The Institutional Investor's Guide to ESG Investing
    Sponsored Content: The Institutional Investor's Guide to ESG Investing

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    Morningstar Indexes' Annual ESG Risk/Return Analysis
    The Future of Infrastructure: Building a Better Tomorrow
    Outlook 2023: Opportunity in a volatile world
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing