A fee-disclosure rule could lead to more exchange traded funds (ETFs) being incorporated into 401(k) plans.
But the retirement industry says it’s taken aback by the deadline for such disclosures, put in place by the Department of Labor: Jan. 1.
The rule is that plan fiduciaries would have to disclose fees and performance numbers, reports Joe Morris for Ignites. Not only that, but it has to be easily understood and done in such a way that it allows for easy comparison of investment options.
Sounds easy enough, doesn’t it? What’s so hard about a little bit of disclosure? That isn’t stopping some in the industry from claiming that the timeline will be hard, if not impossible, to meet.
Break out the Kleenex!
The final rules aren’t likely to be published before the year is out. The comment period doesn’t end until Sept. 8, then the Department of Labor would need to review the rules, and following that, the White House’s Office of Management and Budget has to sign off. That means if the rules were finalized by the year’s end, it would leave little time to prepare.
How is this for an idea: why not just prepare to disclose the fees anyway? The industry doesn’t want to do it, but let’s face it: the heat is on. Investors are getting fed up. Mandatory fee-disclosure is going to come about sooner rather than later.
The Department of Labor needs to stick to its Jan. 1 deadline.
The good news is that some plan providers are already listening and lowering their fees in anticipation of new rules and regulations.