February 26, 2020

Jim Lundy Discusses SEC Scrutiny of 403(b) Plan Sales With NAPA

Jim Lundy was quoted by the National Association of Plan Advisors (NAPA), discussing the U.S. Securities and Exchange Commission’s (SEC) decision to scrutinize sales of 403(b) plans to teachers.

In October 2019, the SEC announced an expansion of The Teacher’s Initiative, which is designed to build on the SEC’s continued efforts to protect retail investors. The expansion includes outreach efforts to educate teachers about the importance of investing and saving, as well as to help them identify red flags and find reputable investment advisors.

“[Scrutiny of teacher plans] is the next phase in a continuing evolution of SEC scrutiny of retail space.”Jim Lundy, NAPA

Lundy suggests that – rather than passing legislation through Congress – the SEC’s effort involves “regulation by enforcement,” noting that the SEC has been using its enforcement division more aggressively to enforce the rules it has in place.

While it’s too soon to tell what the long-term impacts will be, Lundy says that one possible effect of the initiative could be that it results in more diversified and low-cost plan offerings.

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