The Massachusetts Securities Division called on Congress and the Department of Labor to force companies to disclose any changes to the timing of 401(k) plan contributions to workers.
Only plan sponsors are obligated to disclose to participants such changes as moving to an annual match instead of contributing each pay period, a report from the securities division concluded. Earlier this year, the division had sought information from record keepers about whether employers were changing when they made the matching contribution.
“Employees should be told the potential risks involved in a significant change, such as a shift to a year-end annual employer match, and they should be told before the change occurs,” William F. Galvin, Massachusetts secretary of the commonwealth and chief securities regulator, said in a cover letter to the report, which was sent to the Massachusetts congressional delegation and DOL officials on Thursday.
A dozen firms contacted by the division are record keepers, but some challenged the division's authority to request information about their record-keeping services, some said providing information and records would violate confidentiality agreements with clients, and others wouldn't provide information without a subpoena. The companies weren't identified.
Brian McNiff, a spokesman for Mr. Galvin's office, wasn't able to provide additional information.