After years of regulatory wrangling, defined contribution industry professionals are getting little response — either favorable or unfavorable — from plan participants to the Labor Department's fee-disclosure rules that took effect Aug. 30.
“There hasn't been any reaction because people don't look” at documents, said Toni Brown, director of U.S. client consulting and head of U.S. defined contribution for Mercer Investment Consulting in San Francisco.
She was referring to the requirement that plan sponsors initially send a menu of investment fees and other plan fees to participants.
“I think the disclosures were too complicated,” Ms. Brown said, adding she's not surprised by the muted response.
“The message was too complex,” said Ira Finn, benefits consultant for Career Education Corp., Schaumburg, Ill. His firm sent out fee-disclosure notices to 14,000 participants in his company's $200 million 401(k) plan, but no one responded with questions. “There's just too much information. I think employees just saw this as a required notice,” Mr. Finn said.
At a minimum, the DOL regulations require plan sponsors to initially provide a list of fees associated with investment options, as well as fees for plan features such as loans and self-directed brokerage accounts. Subsequent quarterly statements will show the actual dollar costs to participants.
“There has been no response” from the 98,000 participants in the $4.93 billion 401(k) plan for salaried workers at United Parcel Service of America Inc., Atlanta, said Dan Dismukes, corporate retirement department manager for the company that has provided comprehensive fee information since 2003.
Fee-disclosure notices were a “non-event” for clients of Plan Sponsor Advisors, Chicago, said Jennifer Flodin, co-founder and chief operating officer. “The documents are very much prospectus-like, so they look like there's nothing new, although we have seen some that are more in laymen's language,” she said.
“I've heard from record keepers that they ramped up hiring at call centers, but there was not much response,” Ms. Flodin said.