A group calling themselves the Joint 403(b) Taskforce has issued a 10-page 403(b) model Disclosure Form.
The first 2 pages of the form are in checklist format. The first page focuses on the type of educational services provide to the participants by telephone, mail, face-to-face or online interactions; whether account access, loan processing, monthly and quarterly statements are provided by telephone, mail or online, and what the charge is for TPA Fees, Distribution Fees, Loan Origination Fees and Loan Maintenance Fees. It is interesting that of the 4 fees listed on the first page of the checklist, information on 3 of the 4 (Distribution Fees, Loan Origination Fees and Loan Maintenance Fees) should already have been provided to the participants in the Summary Plan Description (SPD) to the plan document. Missing from the checklist are other similar fees, such as plan document fees, amendment fees, and annual compliance fees.
The second page of the checklist contains information about Front End Charges, Surrender Charges, Contract Fee and Mortality & Expense Fees for Annuity Products; and Front End Charges, Surrender Charges, Administrative Fees, Custodial Fees, and Wrap Fees for Custodial Accounts.
The final part of page 2 of the checklist states that it is for “Payments to Third Parties” which are not charged to participants accounts/annuities, including Commissions and/or Other Marketing or Service Payments Directly Related to the Purchase of or Deposits in annuity and custodial products and payments to other third parties related to endorsements, marketing or promoting annuity products.
This suggested 403(b) Disclosure Form does not identify who wrote it other than stating that it is a “Product of the ASBO, NEA & NTSAA Joint 403(b) Taskforce”. Late last year, the American Society of Pension Professionals & Actuaries (ASPPA) announced that they had formed “an industry taskforce dedicated to increasing transparency in the 403(b) marketplace” with the National Tax Sheltered Accounts Association (NTSAA). That press release said that partnering in the taskforce are the National Education Association (NEA) and the Association of School Business Officials (ASBO). The individuals particpating in the taskforce on behalf of their organizations were not identified.
NTSAA was founded in 1989 and combined operations with ASPPA in January of 2010, operating as “a semi-autonomous division under ASPPA”.
This disclosure form should not be confused with Model or Sample forms created by the IRS, DOL and PBGC for disclosing fees and other information. From time to time, the IRS, DOL and PBGC create and distribute Model or Sample forms and amendments whose use provides relief from certain compliance iniatives. Since this suggested disclosure form was not issued by the IRS, DOL or PBGC, it does not provide the same relief as a Model or Sample form issued by the IRS, DOL or PBGC.
