EBSA Rule Enhances Transparency for Workers’ Retirement Investments

by Phyllis Borzi on October 14, 2010 · 2 comments

Assistant Secretary Phyllis Borzi

Today, the Employee Benefits Security Administration (EBSA) released a final regulation to give workers the tools they need to make the best possible decisions in managing and investing their 401(k)-type retirement accounts. Fee transparency is an important tool to help workers maximize returns on their retirement investments.

An estimated 72 million individuals are covered by 401(k)-type retirement plans. Many of those plans allow workers to make their own investment decisions. Despite the fact that nearly $3 trillion is held in these plans, in the past, previously workers were not given comprehensive or access to information regarding the fees and expenses associated with all of the investment options offered by their plans.

Current law does not require that all workers be given the information they need to make informed investment decisions or, when given, that the information be furnished in a user-friendly format.

The final rule announced today is the first time workers will have the ability to make ‘apples to apples’ comparisons of all of the investment options offered by their 401(k)-type retirement plans.

The final regulation requires plan fiduciaries to:

  • give workers quarterly statements of plan fees and expenses deducted from their accounts;
  • give workers core information about investments available under their plan including the cost of these investments;
  • use standard methodologies when calculating and disclosing expense and return information to achieve uniformity across the spectrum of investments that exist in plans;
  • present the information in a format that makes it easier for workers to comparison shop among the plan’s investment options; and
  • give workers access to supplemental investment information in addition to the basic information required under the final rule.

Our goal is to help workers achieve a financially secure retirement. I encourage you to review the regulation and ask questions. You may contact EBSA at http://www.askebsa.dol.gov.

Phyllis Borzi is Assistant Secretary for the Employee Benefits Security Administration.

{ 2 comments… read them below or add one }

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