Participants in public school 403(b) plans will get some of the same disclosure information and protection as their 401(k) counterparts, thanks to new recommended transparency standards announced Wednesday.
The 403(b) Transparency Taskforce, which includes the National Education Association, the National Tax Sheltered Accounts Association and ASPPA, launched the new 403(b) Model Disclosure form.
And for the first time, public school employees with 403(b) plans will receive full disclosure of fees and services attached to those vehicles.
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Upcoming DOL legislation will call for full disclosure of 401(k) and 403(b) fees, though public school plans are excluded from those rulings; the taskforce's new disclosure form is expected to provide an equal level of openness to school plan participants and administrators.
The new 403(b) Model Disclosure form provides an easy and uniform tool for participants to make direct comparisions of their retirement plan options.
"Transparency benefits everyone in the 403(b) marketplace—that's why we urge adoption of the 403(b) model disclosure form by public schools throughout the country," said Brian Graff, executive director and CEO of ASPPA.
"We believe that once these standards are in use, school employees will have a better handle on their retirement plan options. We maintain that improving transparency is a far better approach to improving the 403(b) marketplace, than taking away public school employees retirement choices."
Gary Phoebus, president and CEO of NEA's Member Benefits Corporation, echoed the sentiment.
"NEA believes this disclosure tool will offer clear information for teachers and education support professionals to evaluate the 403(b) options offered by their employers and to make informed retirement planning decisions," he said. "The NEA is committed to offering its members the best resources to support their professional and personal lives."
Educators will ultimately benefit from the clarity and the choices provided by the changes, said Michael Johnston, assistant superintendent of the Clovis (Calif.) Unified School District and president-elect of the California Association of School Business Officials.
"Our members are on the front lines as school administrators, helping school district employees save for their retirements," Johnston said. "Our hope is that this comparison tool will aid administrators in this process and serve as a best practice to simplify and standardize investment provider information for school districts and their employees."
Members of the 403(b) community will have an opportunity to discuss the model disclosure tool at the upcoming NTSAA 403(b) Advisor Summit on February 8-10, 2012 and during a NTSAA-sponsored webcast on February 28 which will guide school administrators and 403(b) advisors through the disclosure tool and implementation process.
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