Saturday, June 22, 2024

Chamber of Commerce and ERIC Call for Reduction in Retirement Plan Disclosures

Industry Groups Call for Simplified and Improved Retirement Plan Disclosures

Are you confused by all the disclosures and paperwork that come with your retirement plan? You’re not alone. Industry groups have recognized the need for simplification and improvement in retirement plan disclosures, and they are taking action to make things easier for both participants and plan sponsors.

The Department of Labor, Internal Revenue Service, and Pension Benefit Guaranty Corporation have been asked to streamline and enhance retirement plan disclosures by industry groups in response to a request for information issued by the DOL. The SECURE 2.0 Act of 2022 mandates that a report be issued by December 29, 2025, with recommendations on how to consolidate, simplify, standardize, and improve retirement plan disclosures.

One of the key issues highlighted by industry groups is the lack of participant understanding and retention of important plan information. For example, many participants are unaware of the fees associated with their 401(k) plans. To address this, industry groups recommend providing essential information at the time of eligibility, such as how to enroll, contribute, and invest, in order to avoid overwhelming participants with too much information at once.

Plan sponsor compliance burden is another important consideration. Employers should be able to administer retirement plans with reasonable expense so that they are not discouraged from offering them. Industry groups suggest improving access to electronic delivery for disclosures and eliminating unnecessary disclosures that do not impact participants’ retirement decisions.

Electronic delivery should be made more accessible and user-friendly for sponsors, and foreign language disclosure requirements should be flexible based on the plan’s demographics. This approach allows plans to tailor their assistance to the needs of their participants and ensures that important information is communicated effectively.

Overall, the goal is to make retirement plan disclosures more user-friendly and actionable for participants while reducing the compliance burden for plan sponsors. By simplifying and improving disclosures, industry groups aim to enhance retirement readiness and ensure that participants have the information they need to make informed decisions about their financial future.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. The content is based on general research and may not be accurate, reliable, or up-to-date. Before making any financial decisions, it is recommended to consult with a professional financial advisor or conduct thorough research to verify the accuracy of the information presented. The author and publisher disclaim any liability for any financial losses or damages incurred as a result of relying on the information provided in this article. Readers are encouraged to independently verify the facts and information before making any financial decisions.

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