It’s been a long winter on the East Coast, but every day brings us closer to spring. One of the things I’m most looking forward to is getting back on my bicycle. I love riding around my neighborhood and exploring new parts of the city – although exploring new paths is always easier with a map.
That’s the spirit behind a new rule issued today by our Employee Benefits Security Administration, which proposes requiring pension plan service providers to give employers and other plan fiduciaries a guide to help them navigate fee disclosure documents.
A guide would help employers locate information that could help them understand what their financial service providers are charging them, and what services they’re getting in return. That’s important because clarity and transparency in fee disclosures translates to better understanding, and that leads to better retirement decisions and increased economic security for workers long after they have cashed their last paycheck.
Pension plan service and investment providers are already required to provide detailed information about the services they provide and the compensation they receive for it, but if this information is buried in long, complex financial documents, or spread out through multiple documents, it can be difficult to locate.
We’re proposing that when the information appears in multiple or lengthy documents, covered service providers provide a guide that identifies where to find the fee information. This change would take us one step further along the path of transparency, accountability and reduced conflicts of interest in the world of retirement savings.
Helping America’s workers save for retirement is a cornerstone of the president’s vision of opportunity for all, which he outlined in his State of the Union address. At the Labor Department, we believe employers deserve the best information possible as they dedicate precious time and resources to setting up and managing retirement plans for their employees. By proposing this rule, we’re doing our part to see that they get it.
For employers, workers and retirees who want to chart a path to retirement security, a good road map is essential.
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