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Small Businesses Find Fee Disclosures Clearer, Study Says

A majority of small businesses said in a recent study that the fee disclosure statements they receive from plan providers and vendors are more understandable than those they received in 2012. ShareBuilder 401(k) reports that 62 percent of small businesses in its recent nationwide study find the disclosures more clear. 

But the fact that plan sponsors find statements more readily understandable does not necessarily translate to satisfaction with their providers. A strong majority of the small businesses that review their fee disclosures — 70 percent — then comparison shop. And nearly 30 percent look for a new provider altogether. 

And it’s not just the employers that are paying attention. Eighty-two percent of respondents said at least some employees took action based on the disclosures. And 41 percent said their employees asked them for better explanations of expenses. 

While many of the small businesses said they would like lower fees, most are willing to invest more if that’s what it takes to get better service. Eighty-six percent said they would spend more on the plan to obtain better support for the plan and participants. 

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John Iekel is Senior Writer at ASPPA, as well as Editor of the ASPPA Net and NTSA Net web portals.