Compliance June 11, 2009

Another Fee Disclosure Bill Introduced in House

U.S. Representative Richard Neal (D-Massachusetts) has introduced legislation that would require administrators of 401(k) plans to provide plan participants with detailed fee and investment disclosures.
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The legislation mandates that plan participants receive an enrollment notice upfront and a quarterly notice updating them on their account, according to Dow Jones Newswires. The legislation would require disclosure of the plans’ risk/return characteristics, historic rates of return in comparison to a benchmark, and whether plan providers would receive payments from a third party in connection with providing services to the plan, among other provisions.

In addition, the bill dictates that plan providers unbundle fees or list the fees individually.

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In a statement to his House colleagues, Neal said that while more disclosure is necessary, it is more important for the information to be provided in a format that’s “easily digestible” and “in plain English” for plan participants, according to Dow Jones.

Neal introduced similar 401(k) fee disclosure legislation in the previous Congress, as did House Education and Labor Committee Chairman George Miller (D-California) along with Representative Robert Andrews (D-New Jersey) (see “Testifiers Debate Merits of Fee Disclosure“).

Comparable legislation has also been introduced in the Senate by Tom Harkin (D-Iowa) (see “Senators Introduce 401(k) Fee Disclosure Legislation“).

Deals & People June 11, 2009

Russella Tapped for Wilmington Trust Retirement Position

Wilmington Trust has named Charles Russella as president of Wilmington Trust Retirement and Institutional Services Company (WTRIS).
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Russella will be responsible for overseeing all sales, marketing, and service-related activities for WTRIS’s trust services, the company said in a news release. Russella will report to Bill Farrell, executive vice president of Wilmington Trust and head of CCS.

Russella succeeds Gregory W. Tschider, Wilmington Trust said.

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Russella and Tschider came to Wilmington Trust last year through the acquisition of AST Capital Trust Company (AST), where Russella had been part of the executive management team since early 2007 (see “Wilmington Trust Expands with Acquisition of AST Capital Trust’).

“Charlie is a terrific leader and an accomplished veteran of the retirement services business,” said Farrell. “He has been a major part of WTRIS’s success and will help us continue to grow the business.”

WTRIS provides trust and custody services for retirement and employee benefit plans, collective fund services, and institutional account services.

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