Fred Reish Quoted in BenefitsPro

Los Angeles partner Fred Reish was quoted in Benefits Pro in an article titled, “Get ahead of the Curve on 401(k) Disclosures.”

The article notes that while the 408(b)(2) fee disclosure regulations will have more far-reaching implications than participant fee disclosure rules, plan sponsors will need to keep abreast of what they need to reveal to plan participants beginning August 30.

Fred said that while he doesn’t believe that the participant disclosures will result in revolutionary changes, he noted that there are some provisions in the regulations that will raise some eyebrows.

He noted that most high-quality plan providers already give participants 90 to 95 percent of the information that is required under the new regulation, so for the most part those rules already are being satisfied.

Participants, however, will begin to receive quarterly statements from their employers telling them about other charges that are directly assessed against their retirement accounts. "I suspect that those charges will attract most of the participants' attention...and, perhaps, their concerns and objections," said Fred.

Fred advised plan sponsors to do the best job they can, as soon as possible, to explain to participants the types of charges they will be seeing on their quarterly statements and the reason for those charges.

"For example, the plan might hire an investment advisor to assist the plan committee in selecting the investment options for the plan. That inures to the benefit of the participants, since they should end up with higher-quality, lower-cost investments. However, if they have not been educated on the reasons for the payments to the investment advisor, they may object to seeing a payment to someone who they do not know and whose services they do not understand," he said.