Compliance May 7, 2012

DOL Issues Additional Guidance for Participant Fee Disclosures

May 7, 2012 (PLANSPONSOR.com) - The Department of Labor’s Employee Benefits Security Administration (EBSA) issued frequently asked questions about the requirements of new participant fee disclosure rules.  
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Field Assistance Bulletin 2012-02 answers questions about what types of plans are covered under the regulation, including tax-sheltered annuity programs under Section 403(b). It also addresses methods of disclosing plan-related information and how to deal with revenue sharing.   

“This guidance will help both plan administrators and covered service providers comply with their obligations under the department’s new fee-transparency rules, so that workers who make their own investment decisions in retirement plans will have the information they need to make informed investment choices,” said Assistant Secretary of Labor for EBSA Phyllis C. Borzi. “We also are working on a second set of frequently asked questions and answers focused more narrowly on the new rules for disclosure by covered service providers.”

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To view Field Assistance Bulletin No. 2012-02, visit http://www.dol.gov/ebsa/regs/fab2012-2.html.    

Benefits May 7, 2012

Employees Not Taking Advantage of 401(k) Plan Offerings

May 7, 2012 (PLANSPONSOR.com) - Despite efforts by employers to educate workers on their 401(k) offering, most workers are not taking full advantage of their plans.
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More than half (54%) of employers report that employees participating in plans are not taking full advantage of the investment options, features and services offered in connection with their 401(k) plan, according to a survey by Charles Schwab.    

In order to better engage employees, the majority of employers plan to make as much or more extensive use of traditional outreach methods, including interactive planning tools (93%), printed educational materials (93%) and in-person workshops (81%). Only 16% of employers plan to adopt or promote personalized savings and investment management through a third-party adviser.  

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A growing number of employers are using or considering the use of automatic solutions. In total, 45% are currently auto-enrolling employees and another 25% are very or somewhat likely to do so.   

In July and August 2011, CFO Research Services conducted an online survey and gathered responses from 215 senior finance and human resources executives at U.S. companies with annual revenues of $100 million or higher.

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