Fee disclosure communication: reality vs. illusion

The first round of fee disclosures will be in the hands of plan sponsors and possibly participants as well. Those in the pensions industry cannot believe that anyone remotely connected with a 401(k) plan is not already aware of these coming disclosures. However, while awareness may be high among service providers, the details of who, when, and how remain murky, especially in smaller plans. Here are some realities of fee disclosure: 1. Fees in the absence of value mean nothing. 2. Chasing the lowest fee provider may not be the best fiduciary decision. 3. Employer fee disclosure is an opportunity for a more clearly defined TPA/advisor partnership. 4. There are two types of participant fee disclosure: an annual report and quarterly statements. 5. Participant fee disclosure has real potential for revolt. 6. Do a second "annual" fee disclosure in November to combine all required notices into one package -- and charge for it.