The question has been asked by many financial advisors, and third party administrators (TPA), and a reporter: \u201chave you heard from any plan sponsors who didn\u2019t get their disclosures from their plan providers?\u201d<\/p>\n
The answer is no. While I don\u2019t think the disclosure compliance rate is 100%, I\u2019m sure it\u2019s more than 98%.<\/p>\n
For the plan providers that didn\u2019t get the required disclosures, I\u2019m sure we will hear from them later. The reason is that too many plan sponsors are reactive, rather than pro-active. That means that if they haven\u2019t received their disclosure, they aren\u2019t going to bother to ask the providers for one and they won\u2019t. They\u2019ll let the Department of Labor (DOL) get them one after being slapped with a prohibited transaction on audit.<\/p>\n
In addition I am sure that there are plan sponsors that still don\u2019t know what disclosures are and the Section 408(b)(2) regulation requirements just like there were Japanese soldiers still fighting World War II 25+ years after the war ended. Again, the only way this is unearthed if another plan provider or sponsors tells them or they get socked by the DOL.<\/p>\n
So while I haven\u2019t seen a plan sponsor that hasn\u2019t received a disclosure from their provider or failed to provide disclosures to participants under Section 404(a)(5) regulations, I\u2019m sure they do exist.<\/p>\n
While plan providers deserve a pat on the back for getting these disclosures out, I\u2019m awaiting the impact of fee disclosures. Will there be price pressure for providers? Will the lowest cost providers win out? Who will suffer from fee disclosure? Which provider is going to be the first one caught for not providing fee disclosure or providing false information? Looks like it will be some time before we see the winners and casualties of fee disclosure.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" The question has been asked by many financial advisors, and third party administrators (TPA), and a reporter: \u201chave you heard from any plan sponsors who didn\u2019t get their disclosures from their plan providers?\u201d The answer is no. While I don\u2019t … Continue reading