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April 14, 2014

Assistant Secretary Phyllis C. Borzi

Hello! I'm Phyllis C. Borzi, Assistant Secretary of Labor for the Employee Benefits Security Administration at the U.S. Department of Labor. Thanks for subscribing to my update for consumers and those interested in retirement issues.

I know many of you plan to get your finances organized, but just never seem to get around to it. That's why, as part of National Financial Capability Month, we are hosting a webcast that will help you do just that.

The Employee Benefits Security Administration and the Certified Financial Planner Board of Standards, Inc. (CFP Board) have some new online tools that can help you get organized, make informed decisions, and plan for a more secure financial future, including a secure retirement.

If you join us for the "Savings Fitness:  A Guide to Your Money and Your Financial Future" webcast on April 23, 2014 from 2:00 to 3:15 pm EDT, you will get information that will help you set short- and long-term financial goals, calculate your net worth, estimate how much you need to save for retirement, develop a budget or cash flow spending plan, and organize your debt so you can plan how to pay it down. 

Sometimes we all need a nudge to get started on the things we know are important, so let's do this together. Join us for the free April 23, 2014 webcast and make April 2014 your own personal financial capability month.

Register for the April 23, 2014 webcast
Read my DOL blog post, "Take Control of Your Financial Life"
Read the Presidential Proclamation


New AARP Survey of Plan Sponsor Attitudes Yields Interesting Findings

In September 2013, AARP released a survey about the attitudes of 401(k) and 403(b) plan participants on fiduciary duty and investment advice that showed 93 percent of plan participants favored requiring the financial institutions that provide these plans to give investment advice that is in the best interest of participants.

Now they have released a second survey of the attitudes of the plan sponsors on fiduciary duty and investment advice — and the findings are very similar. Nearly nine in ten plan sponsors (89 percent) said they would favor requiring financial institutions to give advice to plans or plan sponsors that is in the best interest of plan participants.

I don't find this surprising. Many employers work hard to provide good retirement plans for their workers and do their best to ensure the plan provider is giving good value and services to the plan participants. However, as the AARP survey notes, "for many situations in which advice is offered by plan providers, current laws do not require [them] to act in the best interest of plan participants."

Read "Fiduciary Duty and Investment Advice: Attitudes of Plan Sponsors"
Read "Fiduciary Duty and Investment Advice: Attitudes of 401(k) and 403(b) Participants

Secretary Perez tries out a Shinola bike during a visit to Detroit.

A Road Map to Retirement Security

We have been listening to employers. When fee disclosure rules were issued in 2012, pension plan service and investment providers were required to provide detailed information about the services they provide and the compensation they receive.

While the goal of the rules was to increase transparency for plan sponsors, fee disclosure information is often buried in long, complex financial documents or spread out through multiple documents, making it difficult to locate.

Therefore, we are proposing that when the information appears in multiple or lengthy documents, covered service providers must provide a roadmap or guide that identifies where to find the fee information. A guide would help employers locate information that could help them understand what their financial service providers are charging them, and what services they're getting in return. Clarity and transparency in fee disclosures translates to better understanding. That can lead to better retirement decisions and increased economic security for workers long after they have cashed their last paycheck.

Read Secretary Perez's full blog post here

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