The investment options do not
present 403(b) sponsors with additional challenges, but the multiple provider
structure does. The DOL requires plan-related information in a comparative
chart in the same communication to participants, Roggow said. The intention is
to help participants make an informed decision about how they direct their
For provider disclosures, under the
408(b)(2) regulations, the DOL requires plan fiduciaries to receive disclosures
from all service providers. But the real effort, according to Roggow, will come
when plan sponsors try to determine reasonableness. The opportunity such
disclosures provide, however, is that it can be easier to compare service
provider relationships among plan providers as a starting
Many in the industry will be trying
to help plan sponsors with this effort. For example, TIAA-CREF offers a white paper
that outlines a fiduciary best practice for how to determine reasonableness of
fees, according to Roggow. The white paper poses four questions:
- Who is receiving compensation from the plan?
- What are the fees and expenses associated with the plan?
- How do fees and expenses compare with other service
providers or investment options?
- Why is the compensation warranted?
said it is the last question that addresses the whole concept of value; the
lowest price is not necessarily the best, but sponsors should look for a
balance of services provided for fees.