The Web site, including the new fee disclosures, will be made available online for retirement plan sponsors about the second week of June, Edmund F. Murphy, III, managing director, head of Defined Contribution, Putnam Investments told PLANADVISER.
On the fee disclosure page, plan sponsors will see their total plan assets as well as their total plan expense in an explicit dollar figure. The total plan expense is then broken down into three categories: asset managers; ERISA budget/adviser; and service provider/recordkeeping, allowing a plan sponsor to see the costs for various components of the plan. Each category has fees detailed in both basis points and hard dollar fees. If there are explicit fees, those would be included and disclosed as well, Murphy explained. If a plan sponsor clicks on any of the three categories, the site will display a list of services provided for those fees.
For more detailed fund expense information, plan sponsors can go to a fund revenue details section, which shows the assets for every investment management firm that offers funds within the particular plan as well as the fees being charged by that manager. The expenses are broken down into what is kept by the asset manager and what is shared back to Putnam in both basis points and hard dollar fees.
Murphy also said Putnam is ready to make changes as regulations or legislation come forth mandating specific types of fee disclosure.
New Plan Sponsor Web Site
The fee disclosures to plan sponsors are part of a new plan sponsor Web site, Murphy explained. When a sponsor logs in, he is presented with a new dashboard that provides access to plan information. An online business plan allows for a plan sponsor to have a document of his plan expectations. The Fiduciary Vault section provides storage for plan documents that need to be kept. Plan sponsors have the ability to permission Putnam or their plan adviser access to these documents, Murphy said.
There are three graphs at the top of the dashboard that display plan metrics. Each plan sponsor can choose which metrics to be represented there, Murphy said, from things such as participation, account balances, deferral rates, loans, and diversification. Each graph shows the plan statistics, what the plan sponsor’s documented goal is, and a representative benchmark. Plan sponsors can go beyond these three graphs to view other metrics and segment each data set based on various criteria including age, location, salary, etc.
There is a section for alerts from Putnam, as well as a fund watch section that links to a Morningstar, giving plan sponsors the ability to view holdings based against various criteria and to generate lists of participants for targeted communication about investments.
Other Web Changes
For advisers, Putnam is also preparing an adviser portal that should be available at the end of June, Murphy noted.
Earlier this year, Putnam released an online tool to help retirement plan participants determine how much monthly retirement income their savings will allow for as part of a redesign of the plan participant Web site (see “Putnam Introduces Retirement Income Calculator”). The revamped Web site is currently accessible to all plans being recordkept on the Great-West FASCore platform, Murphy said. In June, that Web will be updated to allow for plan participants to make changes to their asset allocation with only two clicks, Murphy explained.
Later this summer, plan participants will also get the chance to have more fee information at their fingertips on their Web site, Murphy said. When a participant goes to the “Fees and Expenses” section of the Putnam participant Web site, he will have access to a list of the funds he is invested in with their fund expense ratios, any transaction costs associated with the plan, and a list of services provided that are covered by these fees. Putnam is building an online tutorial that helps explain what each charge is for, providing context for making investment choices.
With those tools, Murphy said, participants can determine their own individual costs for the plan. “It’s a little bit of a work in progress,” he said, referring to the participant disclosure site. Although the company has discussed taking it a step further and translating participant fees into a hard dollar cost, Murphy said there were concerns about what participants might do with the actual dollar value of fees.